ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, December 24, 1996 TAG: 9612240105
SECTION: BUSINESS PAGE: B6 EDITION: METRO
SOURCE: GREG EDWARDS
Westmoreland Coal Co. of Colorado Springs, Colo., said Monday it was filing for protection under Chapter 11 of the U.S. Bankruptcy Code to protect itself from demands of the United Mine Workers Pension and Benefit Funds.
The company, which closed all of its Virginia mines in 1995, said it could not meet its obligation to the UMW funds under a 1992 federal law and also remain in business.
The law requires companies that signed any UMW contract since 1950 to guarantee lifetime medical benefits to union miners who retired before October 1994, and companies still operating must pick up medical costs for retirees of companies that have gone out of business. Westmoreland said it is paying benefits to people who never worked for the company or any of its affiliates. It said its liabilities for benefits amount to more than $200 million.
Demands and litigation by the UMW funds that would force Westmoreland to make payments beyond its ability would lead to liquidation at a price below the 142-year-old company's long-term worth, Westmoreland said.
The company said it wants to continue to contribute what it can to protect unaffected retirees, employees, shareholders, worker's compensation recipients, customers and the public.
LENGTH: Short : 31 linesby CNB