<PAGE> 1
FORM 8-K
--------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
--------------
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event Reported) November 4, 1994
----------------
THE COLUMBIA GAS SYSTEM, INC.
-----------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1-1098 13--1594808
- - ---------------------------- ----------- -------------------
(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
</TABLE>
20 Montchanin Road, Wilmington, Delaware 19807
-----------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code (302) 429-5000
--------------
<PAGE> 2
Item 5. Other Events
Information contained in a News Release dated
November 3, 1994, is incorporated herein by reference.
<PAGE> 3
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.
The Columbia Gas System, Inc.
-----------------------------
(Registrant)
By /s/ R. E. Lowe
---------------------------
R.E. Lowe
Vice President and
Controller
Date: November 4, 1994
<PAGE> 4
Contacts: Media - H. W. Chaddock (302) 429-5261
Analysts - T. L. Hughes (302) 429-5363
K. P. Murphy (302) 429-5471
FOR IMMEDIATE RELEASE November 3, 1994
COLUMBIA TRANSMISSION SAYS MEDIATOR REPORT VALIDATES PREVIOUS
PROJECTION AS TO IMPACT OF CONTRACT REJECTION CLAIMS
CHARLESTON, WV -- Columbia Gas Transmission Corp., a unit of
The Columbia Gas System, Inc. (NYSE:CG), said today that an initial report
issued by a bankruptcy court-appointed claims mediator largely validates
assumptions the company used earlier this year to estimate the total value of
contract rejection claims filed by producers in its Chapter 11 proceedings.
As a result, Columbia Transmission continues to believe that
the $1.3 billion estimate it announced earlier this year represents the worst
plausible case for allowed contract rejection claims, although it anticipates
initial recalculations by producers may well exceed that total. The company
also said that, at present, there is no basis for altering the approximately
one billion dollar charge against earnings for contract rejection claims that
it took in 1991.
Columbia Transmission stated that it expected to increase its
previously recorded $200 million reserve for take- or-pay and other
miscellaneous producer claims not related to rejected contracts by
approximately $55 million in the third quarter following its preliminary
interpretation of these producer claim issues in the mediator's report.
Claims Mediator Charles Normandin's initial report, which is
subject to bankruptcy court review and approval, establishes generic parameters
for the initial recalculation of claims filed against Columbia Transmission by
natural gas producers whose gas purchase contracts were rejected. Not
addressed in this report are numerous contract-specific issues that ultimately
will be used in the estimation procedure to determine the allowable level of
producer claims.
<PAGE> 5
- 2 -
Columbia Transmission Chairman and CEO James P. Holland said
the initial report clearly invalidates many of the methods the producers
utilized to calculate and file grossly inflated and legally improper amounts in
their original claims, which amounted to more than $13 billion. In contrast,
the report largely validates the bases for Columbia's earlier estimates.
Holland took sharp issue with published reports that the
claims mediator had upheld "the validity of producer creditor claims" against
Columbia Transmission. "Any suggestion that the claims mediator somehow
endorsed producers' claims as filed is preposterous," said Holland. "We have
no doubt that these claims will be allowed in amounts much closer to Columbia's
estimates than to the producers' filings."
Holland pointed out that while the report uses a lower
discount rate than that used by Columbia Transmission and recognizes certain
proved undeveloped reserves, it directs that calculations of damages be based
only on the amount by which a contract price exceeds a mitigation price and
that any such damages be discounted to a present value as of the petition date.
Holland said Columbia Transmission is not able to calculate
individual contract rejection claims because it does not have data for each
producer on the proved undeveloped reserves or information on planned gas
development projects. Only individual producers have this data, and it will
only become available, and subject to challenge and audit, when the producers
submit their recalculations to the mediator.
Columbia Gas Transmission and its parent company have been
operating as debtors in possession under Chapter 11 of the U.S. Bankruptcy Code
since July 31, 1991.
# # #
