BANKRUPTCY COURT Judge to close Sharon Steel case

In retrospect, shutting down the company was probably the right move, an attorney involved in the case said.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
FARRELL, Pa. -- The 10-year saga of Sharon Steel Corp.'s bankruptcy was scheduled to end today in a conference call between attorneys and federal Bankruptcy Judge Warren Bentz.
With the wrap-up of those proceedings, the name of Sharon Steel fades from the history of the Shenango Valley, where it was a major employer and a major player in the industrial development of the region.
The aging steelmaker was able to survive a 1987 bankruptcy and stayed in operation, but it couldn't survive its 1992 financial failure that saw the court order the plant closed and the assets sold off to pay creditors.
It's taken a decade to complete that process.
Court's decision: Atty. Herbert Minkel Jr. of New York City was a key player in both bankruptcies, representing company creditors in the 1987 case, but representing Sharon Steel in the second.
He recalled that the company pressed the court in April 1993 to allow the company to go back into production, arguing that it was a better option than trying to liquidate the company and all of its holdings, which would be very time-consuming.
The company, once operating again, could have been sold intact to satisfy creditors, Minkel said.
The court refused, backing creditors' demands that the company be broken up to satisfy its debts.
"The judge ultimately made the right call," Minkel said Monday.
Even if the company had gotten back on track in 1993, the general demise of the steel market probably would have caused the same result and employees would have been no better off, he said.
Steelmakers that were a lot stronger financially than Sharon Steel failed to survive the declining industry, Minkel said.
Sharon Steel was clearly still feeling the effects of Victor Posner's rule in 1992 when it filed for the second bankruptcy. Even though the court removed Posner -- who had been accused of draining revenue from the company -- from control during the first bankruptcy, that doesn't mean the company would have survived had it been allowed to reopen in 1993, Minkel said.
What's left: He noted that there are a number of minor items still to be resolved in the second bankruptcy, but the court was expected to close the case today, assigning those tasks to attorneys and others involved in the process.
Among the tasks are the finalization of a sale of vacant land adjacent to the old slag dump on the west side of the Shenango River. There is a buyer for that land, which has some environmental problems that the new owner will have to deal with, Minkel said, noting the sale is awaiting final approval from the federal Environmental Protection Agency.
There are also still some checks due Sharon Steel retirees who were members of the United Steelworkers of America. Efforts to get those checks dispersed haven't been totally successful, Minkel said, noting the court was expected to assign the job of completing that task to him and Atty. Richard Gordon, representing the USW.
Also on the list for today's hearing is the final disbursement of about $500,000 in legal fees the court has been holding to help pay attorneys handling the case, Minkel said.