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):
February 2, 1998
WESTMORELAND COAL COMPANY
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(Exact name of registrant as specified in its charter)
DELAWARE 0-752 23-1128670
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(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
The Company announced today that it and four
subsidiaries have filed a Joint Plan of Reorganization with the
U.S. Bankruptcy Court in Denver in its continuing effort to
preserve and maximize the value of its estate as a going concern
for the benefit of all creditors as well as shareholders.
Item 7. Financial Statements and Exhibits
(c)
No. Description
99.1 Press release dated February 2, 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: February 3, 1998 /s/ Robert J. Jaeger
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By: Robert J. Jaeger
Senior Vice President-Finance
and Treasurer
<PAGE 1>
EXHIBIT 99.1
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Westmoreland Coal Company
Files Plan of Reorganization
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Colorado Springs, CO -- February 2, 1998 -- Westmoreland Coal
Company (Debtor-in-Possession) (OTC Bulletin Board: WMCLQ)
announced today that it and four subsidiaries ("Westmoreland")
have filed a Joint Plan of Reorganization with the U.S.
Bankruptcy Court in Denver in its continuing effort to preserve
and maximize the value of its estate as a going concern for the
benefit of all creditors as well as shareholders. It is
generally expected that the United Mine Workers of America
("UMWA") Pension and Benefit Funds ("Funds") will file a
competing plan. Westmoreland's plan is based on the premise that
if the Funds' claims are correctly characterized and limited to
their proper amounts, then the Company, given its strong
operations base and tax advantaged status, is solvent. As such,
if Westmoreland's plan is confirmed, the Company will manage its
affairs as an on-going concern and its shareholders will retain
an interest in the Company.
As has been reported numerous times, the Company sought for over
14 months to reach an appropriate arrangement with the Funds
before their demands forced the Company to seek protection of the
Bankruptcy Court under Chapter 11. The Company continued its
efforts to reach a settlement with the Funds after its filing on
December 23, 1996, but with equal lack of success. However,
throughout this period the Company has moved forward with
implementation of its business plan begun in 1992. The success
of this turnaround plan is reflected in the strength and
performance of its current core businesses which, along with its
over $227 million in preserved tax assets (NOLs) and cash
reserves of nearly $50 million accumulated over the past year,
support a substantial reorganization value.
Maintaining the current base of dedicated, supportive
shareholders is critical to preserving the NOLs for future use by
the Company. Availability of the NOLs is dependent on limiting
ownership change to no more than 50% of the equity based on value
over the preceding three year period or for the two years
following reorganization. The Company believes that based upon
public information currently on file, there has not been a change
in ownership to date. However, trading by five percent or
greater shareholders would negatively impact that computation.
<PAGE 2>
Having failed to receive any indication from the Funds of
interest in reaching a consensual agreement based on economic
rather than political terms, even after the Court's denial of the
1992 Plan's motion for summary judgment, the Company will now
aggressively challenge the appropriate amount of the Funds'
claims and the Funds' own fiduciary obligations to fairly and
responsibly manage and control the cost and provision of
benefits. Confirmation of the plan is also expressly contingent
on Westmoreland obtaining a determination from the bankruptcy
court that it has no liability to provide health care benefits to
non-Coal Act retirees beyond the expiration of the Company's
current wage agreement with the UMWA in August 1998.
The Company's plan provides that the Funds will share in a
distribution of (i) cash and secured notes totaling up to $75
million and (ii) up to 20% of new common stock of reorganized
Westmoreland. Other allowed claims will be resolved through a
variety of methods including cash payments with interest. Under
the Company's plan submitted today, if confirmed, existing
preferred and common shareholders would retain 80% or more of the
stock in the reorganized Company.
This general description of the plan is not intended to convey
the full detail of the Company's plan of reorganization. The
full terms of the plan are included in the plan and associated
disclosure statement filed today by the Company, and neither
document has been reviewed nor approved by the bankruptcy court.
No hearing dates for approval have been set. Once the court has
approved the disclosure statement, the plan and disclosure
statement will be mailed to all parties in interest. The Company
is prohibited from soliciting support for its plan until the
adequacy of the disclosure statement has been determined by the
Bankruptcy Court. Copies of the Company's filings may be
obtained now by written request to:
Westmoreland Copy Request
c/o Lindquist, Vennum & Christensen, PLLP
Attn.: Shaun A. Christensen, Esq.
600 Seventeenth Street, Suite 2125S
Denver, Colorado 80202
Facsimile: (303) 573-1956
#
For further information contact Diane Jones (719) 448-5814.
