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attorney fees existed prepetition, it was irrelevant whether they were incurred post-petition. The court also looked to 11 U.S.C. § 502(b) regarding the creditor's claim to post-petition interest, which the statute expressly disallows.
i. In re Patriot Coal Corporation, 493 B.R. 65 (Bankr. E.D. Mo. 2013)
Issue: Whether debtors, coal mining companies, met the requirements for rejecting their collective bargaining agreement (CBA) with the union representing many of their employees and for modifying their retiree benefits.
Holding: The bankruptcy court held that, in their pre-rejection requests to modify the CBA, the debtors' failure to provide the union with the specific business models requested by the union did not mean the debtors' failed to provide "such relevant information as was necessary" to evaluate the proposed modifications. The court also held that the debtors' proposed changes to the CBA and retiree benefits were "necessary" and the union did not have "good cause" to refuse the debtors' modifications. The court also held the equities clearly favored allowing the debtors to reject the CBA and modify their retiree benefits because their retiree benefits costs were much more than their competitors, the debtors had already cut costs elsewhere, and concessions from the union were needed for a successful reorganization. "For court approval of a motion to reject and modify a CBA under Section 1113 or to modify retiree benefits under Section 1114, the debtor must meet the following requirements: 1. The debtor in possession must make a proposal to the Union to modify the collective bargaining agreement. 2. The proposal must be based on the most complete and reliable information available at the time of the proposal. 3. The proposed modifications must be necessary to permit the reorganization of the debtor. 4. The proposed modifications must assure that all creditors, the debtor and all of the affected parties are treated fairly and equitably. 5. The debtor must provide to the Union such relevant information as is necessary to evaluate the proposal. 6. Between the time of the making of the proposal and the time of the hearing on approval of the rejection of the existing collective bargaining agreement, the debtor must meet at reasonable times with the Union. 7. At the meetings the debtor must confer in good faith in attempting to reach mutually satisfactory modifications of the collective bargaining agreement. 8. The Union must have refused to accept the proposal without good cause. 9. The balance of the equities must clearly favor rejection of the collective bargaining agreement." The union complained that the debtors' failure to reproduce the results from a highly advanced computer system for the union to "manipulate at its leisure" constituted the debtors' failure to provide "such relevant information as was necessary." The debtors offered the union access to their system to manipulate the numbers, but the union rejected the offer "because then the Debtors would be privy to the [union's] 'thinking' and general tone of contemplated counterproposals." The court found that the debtors met their burden in providing the union with the same business model they relied upon. Modifications are "necessary" if they significantly impact the debtor's ability to successfully reorganize. Courts look to the totality of
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