Patriot Coal announced that its reorganization plan to lead it out of 17 months of bankruptcy was approved by a federal bankruptcy court on Dec. 17.

Bennett Hatfield, the president and chief executive officer of Patriot Coal Corp., said the company would emerge from bankruptcy on Dec. 18 and that the court’s approval of the plan marks the final step of its restructuring.

“We look forward to a new beginning as a well-capitalized company providing a competitive product to the electric utility and steel industries,” Hatfield said.

As part of its push to regain its financial footing since filing for Chapter 11 bankruptcy in July of last year, Patriot Coal Corp. lined up $586 million in financing from Barclays and Deutsche Bank, having already obtained a $250 million infusion through a rights offering backstopped by Knighthead Capital Management LLC, The Associated Press reported.

One of the keys to the plan was Patriot’s settlement in October with former corporate parent Peabody Energy Corp. following of months of legal tangling over retiree health benefits. Under that deal, Peabody, which spun off Patriot in 2007, will spend $310 million over four years to fund the benefits and provide about $140 million in letters of credit to Patriot.

Peabody’s payments will be funneled into a voluntary employee benefit association fund from which benefits to the retirees would be disbursed. Patriot also will contribute $75 million to the fund, plus future payments from royalty and profit-sharing commitments.

The deal also requires the United Mine Workers of America to give up most of its recently granted stake in Patriot.

U.S. Bankruptcy Judge Kathy Surratt-States ruled in May that Peabody was not obligated to continue health care benefits for some 3,100 retirees, but an 8th U.S. Court of Appeals bankruptcy panel reversed her ruling in August.

Patriot sued Peabody earlier this year, seeking to ensure that Peabody did not try to use Patriot’s bankruptcy to avoid having to pay the debated health care obligations.