SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 24, 1999
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P&L COAL HOLDINGS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 333-59073 13-4004153
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
701 Market Street, St. Louis, Missouri 63101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 342-3400
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N/A
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
The Navajo Nation
On June 18, 1999, The Navajo Nation served our subsidiaries, Peabody Holding
Company, Inc., Peabody Coal Company and Peabody Western Company, with a
complaint which had been filed in the U. S. District Court for the District of
Columbia. Other defendants in the litigation are two utilities, two current
employees and one former employee. The Navajo Nation has alleged sixteen claims
including civil RICO, fraud and tortious interference with contractual
relationships. The tribe is seeking various remedies including actual damages of
at least $600 million which could be trebled under the RICO counts, punitive
damages of at least $1 billion, a determination that Peabody Western Coal
Company's two coal leases for the Kayenta and Black Mesa mines have terminated
due to the failure of a condition and a reformation of the two coal leases to
adjust the royalty rate to twenty percent.
We believe this matter will be resolved without a material adverse effect on our
financial condition or results of operations.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit
No. Description
99.1 News release issued by P&L Coal Holdings Corporation dated
June 18, 1999
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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 hereunto duly authorized.
P&L COAL HOLDINGS CORPORATION
/s/ George J. Holway
Date: June 24, 1999 __________________________________________
George J. Holway
Vice President and Chief Financial Officer
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EXHIBIT INDEX
Exhibit
No. Description
99.1 News release issued by P&L Coal Holdings Corporation dated
June 18, 1999
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EXHIBIT 99.1
[PEABODY LOGO] Peabody Group
News Release
CONTACT: Beth Sutton
(520) 525-3168
FOR IMMEDIATE RELEASE
June 18, 1999
PEABODY GROUP SAYS IT WILL VIGOROUSLY DEFEND
NAVAJO LAWSUIT ON LEASE AGREEMENTS
ST. LOUIS, Mo., June 18 - - Peabody Group today said it would vigorously defend
a lawsuit served today by the Navajo Nation related to the 1987 renegotiation of
their coal lease agreements for the Black Mesa and Kayenta Mines in northeast
Arizona.
The mines are operated by Peabody Western Coal Company through lease
agreements originally signed with the Navajo Nation and the Hopi Tribe in the
mid-1960s. The leases now have provisions that allow renegotiation of royalty
rates every 10 years if any party requests a review; two revisions have been
completed since the mines opened. Today, royalties and taxes generated from the
Black Mesa complex typically provide about 20 percent of the Navajo Nation's
annual budget.
The Navajo leases were renewed and expanded in 1987 after both the Navajo
Nation Tribal Council and the U.S. Secretary of the Interior approved the new
agreement. At that time, the renewal included a 12.5 percent coal royalty rate -
equivalent to the federal coal royalty rate - applied to the sales price of each
ton sold to the power plant customers, the Navajo and Mohave Generating
Stations.
The complaint seeks relief for 16 claims related to the 1987 agreements and
names as defendants Peabody as well as Salt River Project and Southern
California Edison, the mine customers who own and operate the Navajo and Mohave
stations. It was filed in U.S. District Court for the District of Columbia and
is related to a previous suit by the Navajo Nation against the United States in
the U.S. Court of Claims.
Last year, the Navajo Nation and Peabody Western reached their second
renegotiated coal royalty agreement for the leases that continues to include a
12.5 percent royalty rate on each ton of coal in addition to a $3.5 million
annual payment. That agreement was subsequently approved by the Navajo Nation
Tribal Council as well as the U.S. Secretary of the Interior.
"We value our longstanding relationship with the Navajo Nation and are
proud of the tremendous economic contribution that mining operations have
brought to reservation communities," said Executive Vice President Roger B.
Walcott Jr. "We are confident that the lawsuit is without merit and our intent
is to aggressively defend our actions."
Since mining operations began, the Black Mesa and Kayenta mines have
injected more than $1.2 billion into Navajo and Hopi tribal economies in
royalties, taxes, wages and charitable contributions. Each year, Peabody Western
provides the Navajo Nation and the Hopi Tribe with more than $40 million in
royalties and taxes generated from the mining operations.
