NEWLY IMPLEMENTED LEGISLATION MAY AFFECT KAISER RESOURCES INC.
RANCHO CUCAMONGA, Calif., Jan. 10 /PRNewswire/ -- Kaiser Resources Inc. (NASDAQ: KRSC) announced today that the United Mine Workers Association has recently advised the company of its position that the 1988 bankruptcy discharge of Kaiser Steel Corp.'s liabilities does not extinguish the company's potential liability for premiums levied under the recently implemented Coal Industry Retiree Benefit Act of 1992. This legislation imposes on coal mining companies and their successors the costs of health and death benefit premiums for qualified retired coal miners. The U.S. Social Security Administration has initially assigned Kaiser responsibility for approximately 550 qualified retired coal workers and their dependents resulting in a claim for approximately $100,000 in monthly health benefit premiums. Kaiser Resources has begun legal efforts to challenge this assignment of responsibility. The company is also evaluating other appropriate action. In 1987, Kaiser Steel Corp. filed for bankruptcy and Kaiser Resources, formerly Kaiser Steel Resources, emerged in 1988 as the reorganized successor. Kaiser Resources was discharged of substantially all liabilities of Kaiser Steel. Kaiser Steel Corp. directly or through subsidiaries owned and operated coal mines from 1942 until 1989 when all mining activities ceased. The new company's largest shareholder is the New Kaiser Voluntary Employee Beneficiary Association (VEBA), a medical benefits trust representing approximately 7,000 retirees of Kaiser Steel and their dependents. Through its majority ownership, the VEBA has restored health and death benefits to these retirees. This assignment represents claims made by the United Mine Workers Association (UMWA) Combined Benefit Plan for premiums of approximately $100,000 per month for 1994. Additionally, the UMWA is attempting to claim approximately $680,000 in premiums incurred for 1993 plus an additional $75,000 in overhead expenses. These premiums could continue for the lifetime of the retired miners and their qualified relatives. With the possible exception of this newly implemented legislation, all benefit claims, including any made by the UMWA, were fully considered and resolved in the 1988 bankruptcy reorganization. Kaiser Resources intends to vigorously challenge this initial assignment of responsibility. In addition, all remaining assets of Kaiser's coal operations are held by Kaiser Coal Co., the last operator of the coal mines. Kaiser Coal Co. remains in Chapter 11 bankruptcy with substantial assets. The company believes that Kaiser Coal Co. may be responsible for a portion of these premiums. Kaiser's President, Daniel Larson, said, "In light of the comprehensive reorganization of Kaiser Steel's liabilities in 1988, I cannot imagine that elevating 500 coal retirees' claims above those of 7,000 retired steel workers and other creditors was Congress' intention when passing this legislation." Kaiser Resources Inc. is an emerging environmental resources company pursuing projects in solid waste management, water resources and property redevelopment. -0- 1/10/94 /CONTACT: Pamela Catlett, director of investor relations, 909-944-4155/ (KRSC)
CO: Kaiser Resources Inc.; United Mine Workers Association ST: California IN: MNG ENV SU:
JL -- LAON1 -- 0420 01/10/94 08:50 EST
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|Date:||Jan 10, 1994|
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