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JUDGE TO RULE ON INJUNCTION HALTING BP AMERICA SALE

A federal judge is expected to rule soon on a preliminary injunction that could scuttle BP America's plans to sell its $115 million coal operations to Ziegler Holding Co.

BP America is being sued by Sunnyside Mines Inc. over a deal Sunnyside says it made with a BP subsidiary to purchase $3.5 million in coal leases. Sunnyside alleges Pike Coal Co. backed out on an agreement reached last March.BP attorneys in Salt Lake City said the injunction could bar BP from going through with the Ziegler sale until the issue comes to trial, as long as a year or more from now.

U.S. District Judge David Winder indicated he would rule before the July 20 date BP America has set to close the deal with Ziegler.

Sunnyside Attorney Richard Giauque said Pike officials told Sunnyside that its board of directors had approved the sale of the leases, which Sunnyside insists are critical to future operations of its mine properties in central Utah.

BP attorney Ray Etcheverry told the judge no contracts for the leases were finalized.

"When Pike heard of BP's sale to Ziegler, Pike decided it wasn't a good time to be selling assets," Etcheverry said.

He said if the court stops the transfer of Pike Coal stock, BP America would be unable to meet the closing conditions on its six coal subsidiaries "and in all likelihood the Ziegler transaction will not close."

The Pike portion of the deal represents a significant part of the entire transaction.