October 28, 2016

CONFIDENTIAL & INADMISSIBLE

SETTLEMENT COMMUNICATION
SUBJECT TO FRE 408
Ms. Brita Horn
Routt County Treasurer
522 Lincoln Ave
Steamboat Springs, Colorado 80487
Re:

Peabody Energy Corporation re: Routt County Treasurer.

Dear Ms. Horn:

On April 13, 2016 (the "Petition Date"), Peabody Energy Corporation ("Peabody") and
its affiliated debtors (collectively, the "Debtors") filed voluntary petitions for relief under
chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in the United States
Bankruptcy Court for the Eastern District of Missouri (the "Bankruptcy Court"). By order of the
Bankruptcy Court, these cases have been consolidated for procedural purposes only and are
being administered jointly under the caption In re Peabody Energy Corporation, et al.,
Case No. 16-42529-399 (the "Bankruptcy Cases").
On July 21, 2016, the Bankruptcy Court entered the Order, Pursuant to Sections 105(a)
and 363(b) of the Bankruptcy Code, Authorizing the Debtors to Pay Prepetition Secured or
Priority Property Taxes [Docket No. 955] (the "Property Tax Order"), 1 which, in relevant part,
authorized the Debtors to pay certain prepetition personal and real property taxes.
The Debtors have reviewed proof of claim numbers 1817, 1820, 1821 and 1822 filed by
the Routt County Treasurer (the "Treasurer") on certain parcels of real property and items of
personal property located within Routt County, Colorado (collectively, the "Property"), which
include assertions of personal and property tax due for the 2015 tax year in the aggregate
principal amount of $1,798,462.38 and interest accruing through the date that the Treasurer
receives Peabody's payment, which, as of October 31, 2016, is interest in the amount of
$100,574.45 (collectively, the "Tax Claim"). If the Treasurer receives Peabody's payment on
November 1, 2016 or later, Debtors shall also pay all additional interest that accrues in
accordance with Colorado law. Based on such review and conversations with you, the Debtors
1

All capitalized terms used but not defined herein shall have the meanings given to them in the Motion of
the Debtors and Debtors in Possession, Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code, for
an Order Authorizing Them to Pay Prepetition Secured or Priority Property Taxes, dated July 6, 2016
[Docket No. 891].

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Brita Horn
October 28, 2016
Page 2

propose to settle the Pre-2016 Tax Claims (as defined in paragraph 1(c)), pursuant to the
authority granted in the Property Tax Order, as described below (the "Settlement").
In order that the Debtors may promptly process payment, please acknowledge below your
agreement as to the amount and method of payment in full and complete satisfaction of the
Treasurer's tax claims for tax periods before 2016.
1.

The Settlement.

(a) The Debtors will promptly pay the principal amount of the Tax Claim of
$1,798,462.38 and outstanding interest on the Tax Claim (that shall accrue up to the date
that the Debtors make the Payment) in an amount not to exceed $100,574.45
(the "Payment") to the Treasurer as a secured tax claim, which the Treasurer will apply in
accordance with the terms of the Property Tax Order;
(b) The Debtors will promptly pay $65,197.65 to Klenda Gessler & Blue LLC,
counsel for the Routt County Treasurer, in full satisfaction of all amounts incurred related
to work performed in connection with the Tax Claim (the "Fees");
(c) The Settlement shall constitute full and complete satisfaction of the Tax
Claim, the Fees and all claims, disputes or causes of action the Treasurer may have
against the Debtors or their properties or estates with respect to the 2015 property taxes
that are past due (including interest) (collectively, the "Pre-2016 Tax Claims");
(d) The Treasurer and/or Klenda Gessler & Blue LLC will not file or amend any
proof of claim inconsistent with the amounts and priorities of paragraphs 1(a) through
1(c) above, against the Debtors or their estates related to, or arising out of any Pre-2016
Tax Claims. Any proof of claim contrary to the preceding sentence or any additional
claims filed by or on behalf of the Treasurer, Klenda Gessler & Blue LLC or their
respective successors or assigns arising out of or related to Pre-2016 Tax Claims shall be
null, void and of no effect;
(e) Upon receipt of the Payment, the Treasurer will provide the Debtors with a
letter confirming that the Pre-2016 Tax Claims are satisfied in full and no lien for these
claims, statutory or otherwise, exists as to the Property; and
(f) In consideration for the above, the Treasurer and Klenda Gessler & Blue LLC
agree (i) to forever release the Debtors from any and all claims, obligations, suits,
judgments, damages, demands, debts, rights and liabilities, whether liquidated or
unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or
unforeseen, concealed or hidden, now existing or hereafter arising, in law, equity or
otherwise related to the Pre-2016 Tax Claims; (ii) to keep all terms of, and negotiations
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Brita Horn
October 28, 2016
Page 3

related to, this Settlement confidential; and (iii) to release a joint press statement with the
Debtors regarding the Settlement.
2.
Payment Date. The Debtors shall deliver the Payment to the Treasurer and the
Fees to Klenda Gessler & Blue LLC promptly upon the receipt of an executed copy of this
Settlement from the Treasurer.
3.
Payment Instructions. By acknowledging below, the Treasurer agrees that the
Payment should be wired to the following account:
Bank Name:
ABA Routing Number:
Account Number:
Name on Account:

Wells Fargo
g Bank
121000248
6440000169
Treasurer of Routt County Operating Account

4.
Payment Instructions. By acknowledging below, Klenda Gessler & Blue LLC
agrees that the Fees should be wired to the following account:
Bank Name:
ABA Routing Number:
Account Number:
Name on Account:

Chase Bank, N.A.

102001017
607271751
Adroit Advocates LLC d/b/a Klenda Gessler &
Blue LLC

5.
Compliance with the Property Tax Order. Pursuant to the Property Tax Order,
the Debtors are authorized to enter into this Settlement and make Payment without prior notice to
other parties in interest or further order of the Bankruptcy Court. Upon receipt of the Payment,
the Treasurer must apply such Payment in accordance with paragraph two of the Property Tax
Order.
After acknowledging and agreeing below, please fax or email a signed copy of the letter
to the attention of Amy Edgy at (202) 626-1700 or aedgy@jonesday.com. If you have any
questions or concerns, you can contact Amy Edgy at (202) 879-3939. We appreciate your
cooperation in this matter.

NAI-1502155347v9

Brita Horn
October 28, 2016
Page 4

Sincerely,

Robert F. Bruer
Vice President, Tax Compliance & Reporting
Peabody Energy Company

ACKNOWLEDGED AND AGREED

_____________________________
(Signature)
_____________________________
(Print Name)
_____________________________
(Title)
_____________________________
(Date)

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