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UPMC Health Plan asks court to end brewer's plan coverage
Friday, March 10, 2006

UPMC Health Plan sought court approval yesterday to terminate health insurance coverage for more than 100 of Pittsburgh Brewing's union workers, saying the company had failed to pay $195,000 in premiums since it filed for bankruptcy Dec. 7.

In a motion filed in federal bankruptcy court Downtown, the insurer said its exposure to significant losses increases daily because it continues providing coverage even though it has not been paid.

UPMC said it did not intend to renew coverage when its current agreement with the brewery expires April 30.

Union workers contribute 12.5 percent of their pay toward their health insurance.

Separately, U.S. Judge M. Bruce McCullough ruled Pittsburgh Brewing could continue making weekly loan payments of $9,100 to Chicago lawyer Jack Cerone, who owns a minority stake in the company and is a secured creditor. The payments are for one of two loans Mr. Cerone made to the company. Weekly payments on the other loan, amounting to about $2,200, should not be made for the time being, the judge ordered.

The brewery's unsecured creditors went to court last month to stop the payments, claiming that Mr. Cerone was not entitled to them since he was a stockholder and a director of the company.

The order signed yesterday is the result of negotiations since then between attorneys for creditors and the company. Their agreement also makes one of the bankrupt company's choicest assets, the brand names for its Iron City and IC Light beers, back within reach of creditors. The assets were technically owned by Keystone Brewers, a related entity.

First published on March 10, 2006 at 12:00 am
Len Boselovic can be reached at lboselovic@post-gazette.com or 412-263-1941.