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):
March 20, 1996
THE PITTSTON COMPANY
(Exact Name of registrant as specified in its charter)
Virginia 1-9148 54-1317776
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of Incorporation)
100 First Stamford Place
P. O. Box 120070
Stamford, Connecticut 06912-0070
(Address of principal (Zip Code)
executive offices)
(203)978-5300
(Registrant's telephone number, including area code)
Item 5. Other Events
Evergreen Case Developments
In 1988, the trustees of certain pension and benefit
trust funds (the "Trust Funds") established under collective
bargaining agreements with the United Mine Workers of America
("UMWA") brought an action (the "Evergreen Case") against The
Pittston Company (the "Company") and a number of its coal
subsidiaries in the United States District Court for the District
of Columbia, claiming that the defendants are obligated to
contribute to such Trust Funds in accordance with the provisions
of the 1988 and subsequent National Bituminous Coal Wage
Agreements, to which neither the Company nor any of its
subsidiaries is a signatory. In January 1992, the Court issued
an order granting summary judgment in favor of the trustees on
the issue of liability, which was thereafter affirmed by the
Court of Appeals. In June 1993, the United States Supreme Court
denied a petition for a writ of certiorari. The case was
remanded to the District Court where damage and other issues were
to be decided. In September 1993, the Company filed a motion
seeking relief from the District Court's grant of summary
judgment based on, among other things, the Company's allegation
that plaintiffs improperly withheld evidence that directly
refutes plaintiffs' representations to the District Court and the
Court of Appeals in this case. In December 1993, that motion was
denied. The Company, following the District Court's ruling in
December 1993, recognized in 1993 in its consolidated financial
statements and in its financial statements for the Pittston
Minerals Group the potential liability that might have resulted
from an adverse judgment in the Evergreen Case. On May 23, 1994,
the trustees filed a Motion for Entry of Final Judgment seeking
approximately $71.1 million in delinquent contributions, interest
and liquidated damages through May 31, 1994, plus approximately
$17,000 additional interest and liquidated damages for each day
between May 31, 1994, and the date of entry of final judgment,
plus on-going contributions to the 1974 Pension Plan. The
Company opposed this motion. No decision on this motion of final
judgment was entered.
In furtherance of its ongoing effort to identify other
available legal options for seeking relief from what it believes
to be an erroneous finding of liability in the Evergreen Case,
the Company filed suit against the Bituminous Coal Operations
Association ("BCOA") and others to hold them responsible for any
damages sustained by the Company as a result of the Evergreen
Case. In December 1994, the District Court ordered the Evergreen
Case as well as related cases filed against other coal companies,
and the BCOA case, be submitted to mediation before a federal
judge in an effort to obtain a settlement.
In late March 1996 a settlement was reached in these
cases, including the Evergreen Case. Under the terms of the
settlement, the coal subsidiaries which had been signatories to
earlier National Bituminous Coal Wage Agreements agreed to make
various lump sum payments in full satisfaction of all amounts
allegedly due to the Trust Funds through January 31, 1996, to be
paid over time as follows: approximately $25.8 million upon
dismissal of the Evergreen Case and the remainder of $24 million
in installments of $7.0 million in 1996 and $8.5 million in each
of 1997 and 1998. The first payment was entirely funded through
an escrow account previously established by the Company. In
addition, the coal subsidiaries agreed to future participation in
the UMWA 1974 Pension Plan. The BCOA case and a separate case
against the UMWA have also been dismissed.
As a result of the settlement of these cases, the
Company expects to record a pretax gain of approximately $35
million in the first quarter of 1996 in its consolidated
financial statements and in its financial statements for the
Pittston Minerals Group.
Pending Accounting Charges
The Company is required to implement a new accounting
standard, Statement of Financial Accounting Standards ("SFAS")
No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of," in 1996. SFAS No. 121
requires companies to review long-lived assets and certain
identifiable intangibles to be held and used by an entity for
impairment whenever circumstances indicate that the carrying
amount of an asset may not be recoverable. SFAS No. 121 requires
companies to utilize a two-step approach to determining whether
impairment of such assets has occurred and, if so, the amount of
such impairment. Although the Company is still reviewing the
impact of adopting SFAS No. 121, it is estimated that the
Company's Coal Operations, which is part of the Pittston Minerals
Group, will incur a pretax charge to earnings of $25 to $30
million as of January 1, 1996.
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 PITTSTON COMPANY
(Registrant)
Austin F. Reed
By____________________________
Vice President and Secretary
Dated: March 22, 1996