CSC Buyer interest won reprieve, attorney says

Lenders also agreed to buy health insurance for about 20 employees still working at the darkened steel mill.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- A lawyer representing CSC Ltd. in bankruptcy court, says positive news about potential buyers showing interest in the plant helped persuade banks to grant the company a sale reprieve.
Banks holding the purse strings have agreed to extend a deadline for selling the troubled steel mill intact, giving the CSC more time to find a buyer.
Lenders had set Friday as the final date for selling the company as an operating concern, saying last month that they would push to have it dismantled and sold piece by piece if no buyer had come forward by then.
Atty. Jeff Baddeley, legal counsel for CSC in its Chapter 11 bankruptcy filing, said news of buyer interest made a difference.
Letters: Also, Gov. Bob Taft, U.S. Reps. Sherrod Brown, D-13th, and James Traficant Jr., D-17th, Warren Mayor Hank Angelo, Trumbull County commissioners and a host of other officials were part of a letter-writing campaign urging the lenders to give the extension.
And just as important, said Don Caiazza, vice president of commercial sales, the company kept its promises to the lenders.
It completed mothballing of plant equipment by the April 13 deadline, it is aggressively pursuing unpaid bills customers owe the steelmaker and it is continuing to market the plant.
Supporters have argued that selling the plant piecemeal instead of intact would permanently eliminate more than 1,300 jobs and have a devastating impact on the community.
The lender group, led by First Union Corp. in Charlotte, N.C., agreed to an open-ended extension and will continue paying for very limited, maintenance-level operations. Lenders have asked for an operating budget, and the company is preparing one.
Buyer: The company is in talks with a potential buyer, Baddeley said, and expects to receive a letter of intent to purchase very soon. Officials hoped to have that offer in hand before the deadline expired.
He said he could not reveal the name of the buyer, citing confidentiality agreements.
John Kubilis, president of United Steelworkers of America Local 2243 told Taft's staff earlier this week that there are two serious buyers looking at the plant.
Caiazza cautioned that it may take weeks or months to finalize any sale of the mill. "It's early in the process for us to be getting any serious interest," he said. "Deals this complex can take weeks or months..."
Caiazza said CSC will have about 20 workers at the plant next week -- half hourly and half salaried.
Hourly employees will be performing maintenance and security functions; salaried employees will continue working with potential buyers and collecting outstanding customer bills.
He said workers have collected about 70 percent, but still have between $10 million and $11 million left to work on.
Insurance: In another development, Guy Catania, CSC vice president of human resources, said the lenders also agreed to pay health insurance benefits for April to hourly workers employed at the plant. He learned of the agreement Friday, but didn't know if the coverage would continue after April 30.
Health benefits for the few employees still working, furloughed workers and some retirees were terminated April 1 when Judge William Bodoh of the U.S. Bankruptcy Court in Youngstown ruled that the lenders could not be forced to continue to pay a $170,000 weekly payment for the coverage.
Kubilis has said that continued coverage for the working employees is crucial because laid-off workers may be able to piggyback on it to pay for coverage themselves under COBRA, a benefit provided under federal law.
Catania said he didn't know if the COBRA arrangement would work in this case and Kubilis could not be reached.
Catania said Friday was his last day at CSC, and he was starting a new position Monday. Caiazza is one of the few salaried workers staying on at the mill.