“The Guffy acquisition represents a valuable, synergistic, bolt-on opportunity for Arch that extends the reserves and mine life at Leer, one of our premier, metallurgical coal operations in Appalachia,” said John W. Eaves, Arch Coal’s president and chief executive officer.

Arch has resolved all pending and potential legal claims with Patriot stemming from Arch’s sale of coal companies to Magnum Coal Co., a subsidiary of ArcLight Capital Partners LLC, in 2005 and the subsequent purchase of those companies by Patriot in 2008. In consideration for this release, Arch will pay $5 million in cash to Patriot upon its exit from bankruptcy. Additionally, the settlement includes the release of a $16 million letter of credit posted by Patriot in Arch’s favor for surety bonds related to the companies sold to Magnum. Under the terms of the agreement, Patriot is required to replace the bonds in their own name or repost an $8 million letter of credit in Arch’s favor by Dec. 31, 2015.

“This comprehensive settlement with Patriot relieves Arch of costly legal expenses, resolves the distraction of litigation claims, and allows Arch’s management team to remain focused on steering the business through current market conditions and preparing for a recovery,” Eaves said.

Following the settlement with Patriot, Arch remains in active discussions on a potential resolution with the United Mine Workers of America (UMWA) on outstanding litigation claims. The U.S. District Court recently dismissed the ERISA claim the UMWA had filed against Arch.

“In the wake of the U.S. District Court decision in favor of Arch, we have put forth a good faith offer to the UMWA for a settlement that would resolve all pending and potential legal claims brought by the UMWA, and we are in discussions with them on a potential resolution,” said Robert G. Jones, Arch Coal’s senior vice president – law, general counsel and secretary.