WCI STEEL Retiree pension funding to go on

An attorney for WCI's parent reiterated promises to pour cash into the mill.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- WCI Steel will continue to fund its retiree pension plan, now that Judge William Bodoh has overruled an attempt by the Warren steelmaker's largest lenders to halt the payments.
Judge Bodoh refused Friday to grant WCI's secured bondholders a temporary injunction blocking WCI from paying a $5 million minimum pension contribution due Nov. 15.
The lenders, who hold $300 million of WCI's long-term bonds, had argued the company can't afford to keep funding the plan. WCI is continuing to operate after filing for Chapter 11 bankruptcy protection in September.
Judge's ruling
In the ruling, issued in federal bankruptcy court in Youngstown, the judge wrote that bondholders failed to prove they would "suffer irreparable harm" if the injunction were not issued. Judge Bodoh noted that the lenders do have other legal alternatives available.
Thomas Moers Mayer, legal counsel for the bondholders, said in court that the lenders would likely file lawsuits every three months to try to get the $5 million quarterly pension contributions back if Judge Bodoh refused to issue an injunction.
Mayer, representing Wilmington Trust Co. and 12 other secured lenders, told the judge that WCI's parent Renco Group is ultimately responsible for the pension payments if WCI can't pay.
"It's not about whether the payments should be made, it's about who should make them," Mayer said. "This issue is not about hurting people covered by the bargaining agreement. We don't believe what we're asking affects them in any way."
Argued for payment
Attorneys for WCI, its New York-based parent company Renco Group and the United Steelworkers of America all argued that the Warren steelmaker is legally bound to pay its pension contributions under its union contract.
Atty. Christopher Meyers, representing WCI, said the company wants to abide by its collective bargaining agreement with Local USWA 1375, which represents about 1,400 hourly workers.
WCI doesn't want to breach its contract with the union, he said, especially as it works with the local to make cost-cutting contract revisions as part of the company's restructuring effort.
An attorney for Renco Group raised questions about the bondholders' argument that the New York holding company or one of its other subsidiaries would foot the pension bill for WCI.
Atty. Adam Rogoff acknowledged that the federal Pension Benefit Guaranty Corp. and the IRS might file liens against the company if WCI didn't pay. "That is not synonymous with requiring Renco to make a payment on Nov. 16," he said, "and it does not mean that a payment would be made by Renco."
Calling for the lenders to settle the issue in "a non-litigious fashion," Rogoff said Renco has already offered extra financial help.
More money
He confirmed that the holding company is prepared to pump "significant new money" into WCI as part of a restructuring plan which would also have to include new financing terms from the company's lenders and a more cost-effective bargaining agreement with the USWA.
Edward Caine, WCI president, said he wanted to get the pension issue resolved so WCI officials can focus on restructuring the company's debts. Caine said the company has been meeting with its lenders, USWA officials and Renco representatives, but he would not say what progress has been made.
vinarsky@vindy.com