Peabody Energy

Peabody Energy's 2016 bankruptcy marked the fall of the world's largest private coal company. The company made a catastrophic bet in 2011, acquiring Macarthur Coal for $5.1 billion at peak coal prices. When natural gas prices collapsed and climate regulation accelerated, Peabody found itself overleveraged in a declining industry. The company exemplified the commodity trap: high fixed costs requiring high utilization in an industry facing secular decline. Peabody emerged from bankruptcy in 2017 as a smaller company, but the path-dependent investment in coal assets still defines its trajectory.