Form 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report(Date of earliest event reported):
July 28, 1998
WESTMORELAND COAL COMPANY
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(Exact name of registrant as specified in its charter)
DELAWARE 0-752 23-1128670
-------- ----- ----------
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation or Number Identification
organization) No.)
2 North Cascade Avenue, 14th Floor, Colorado Springs, Colorado
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80903
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(Address of principal executive offices)
(Zip Code)
Registrant's telephone number,
including area code: 719-442-2600
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Item 5. Other Events
On July 28, 1998, the Company and four subsidiaries
announced that they have filed a motion with the US Bankruptcy
Court to dismiss their chapter 11 cases based on substantial
changes in law that have resulted from recent court decisions
in other cases and the significant improvement in Westmoreland's
financial condition.
Item 7. Financial Statements and Exhibits
(c)
No. Description
99.4 Press release dated July 28, 1998
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
WESTMORELAND COAL COMPANY
Date: July 29, 1998 /s/ Robert J. Jaeger
--------------------------
By: Robert J. Jaeger
Senior Vice President-Finance
and Treasurer
<PAGE 1>
EXHIBIT 99.4
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Westmoreland Files Motion
to Dismiss Bankruptcy Cases
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Colorado Springs, CO -- July 28, 1998 -- Westmoreland Coal
Company (Debtor-in-Possession) (OTC Bulletin Board: WMCLQ) and
four subsidiaries announced today that they have filed a motion
with the US Bankruptcy Court to dismiss their chapter 11 cases
based on substantial changes in law that have resulted from
recent court decisions in other cases and the significant
improvement in Westmoreland's financial condition. The Company
believes that dismissal of the chapter 11 cases will benefit all
creditors and the shareholders. Westmoreland and the
subsidiaries filed for protection under chapter 11 of the US
Bankruptcy Code on December 23, 1996.
As a result of its continued turnaround efforts, the automatic
stay under chapter 11 of the UMWA Combined Benefit Fund and the
UMWA 1992 Benefit Plan assessments and certain highly favorable
events, the Company's financial condition has improved
significantly since the petition date. The Company is now able
to (1) immediately pay in full all undisputed claims, in cash,
with interest; (2) provide such security as is required by
section 9712(d)(1)(C) of the Coal Act (approximately $20.8
million) by the dismissal date; (3) meet all of its presently
foreseeable obligations, including future premiums ordinarily
assessed by the UMWA Combined Benefit Fund and the UMWA 1992
Benefit Plan; and (4) reinvest a significant residual cash
balance in new opportunities in an effort to increase the
Company's value through the use of its $224 million net operating
loss carryforward ("NOL"). In order to protect the interests of
the Companies' numerous retirees and their dependents, who rely
on the Company and the Funds for their medical benefits, the
proposed terms of dismissal include a provision that the Company
will not pay dividends out of existing surplus or cash in hand at
the time of the dismissal. Under the proposed conditions, the
Company would have the right to pay dividends out of future
earnings to the extent permitted by Delaware law.
Westmoreland believes that the UMWA Health and Benefit Funds'
("Funds") plan of reorganization currently pending before the
Bankruptcy Court is not confirmable. This contention is based in
part on the recent Tenth Circuit Court of Appeals ruling in the
Sunnyside case which holds that the Funds' claims are
administrative priority taxes, and therefore cannot include the
present value of future, post-bankruptcy assessments. As such,
the Funds' plan of reorganization violates the Bankruptcy Code by
paying the Funds far in excess of their allowable claims and
depriving shareholders of their ownership interests. Also, the
recent US Supreme Court ruling in the Eastern case undermines the
viability of the Coal Act by abrogating a fundamental part of its
funding scheme which may lead to the overall invalidation of the
Act or new legislation.
<PAGE 2>
Westmoreland has also received notice that the recently formed
Official Committee of Equity Security Holders intends to file a
motion today based on the Sunnyside ruling as well. The
Committee argues that upon liquidation in chapter 7, the Funds'
claims would be limited to only those amounts incurred during the
bankruptcy, which would leave a residual value for distribution
to shareholders. It is Westmoreland's position that dismissal,
rather than conversion of the chapter 11 cases, is preferable and
should be granted by the Court for the benefit of the creditors
and to allow for the preservation and creation of substantial
value for shareholders.
Westmoreland Coal Company, headquartered in Colorado Springs, CO
is engaged in Powder River Basin coal mining, independent power
and coal shipping and terminal facility operations.
The foregoing information contains "forward-looking
statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These statements are
qualified by important factors that could cause actual
results to differ materially from those in the forward-
looking statements including without limitation: the
decisions of the Bankruptcy Court, general economic and
competitive conditions, the completion of the sale of a
significant asset and the ability to reinvest excess
cash at an acceptable rate of return. Factors that
could cause actual results to differ materially from
those in the forward-looking statements, or that
contribute to such a difference, are identified in the
Motion to Dismiss.
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For further information contact Diane Jones (719) 442-2600.
