BANKRUPTCY COURT WCI presents plan to keep executives

For competitive reasons, the company wants to keep details of the plan a secret.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- WCI Steel wants to offer financial incentives to 33 key executives to keep them from leaving the beleaguered company while it works to emerge from bankruptcy court protection.
In court filings, the company is proposing severance payments for those employees "whose premature departure from the company would be severely detrimental to the company's reorganization efforts."
Payment would not be made if the employee jumped ship voluntarily or was terminated for cause.
Judge William T. Bodoh will consider the company's plan, called a key employee retention program, at a hearing set for 10 a.m. Dec. 9 in U.S. Bankruptcy Court here.
The proposal would benefit less than 9 percent of WCI's 400 salaried employees. The company, the Mahoning Valley's third-largest industrial employer, also has about 1,400 hourly workers.
If the court approves the retention plan, WCI would make the payments in lump sums to workers in the assigned group who were involuntarily and permanently terminated, for no fault of their own, should the company close or be sold to a new owner.
What's kept secret
Court documents do not reveal the amounts of the proposed severance payments or the names and titles of those who would receive them. WCI is asking Judge Bodoh to keep those facts secret for competitive reasons.
If its competitors had access to the figures, the company argued, they might use the information to recruit WCI's key employees and jeopardize its efforts to reorganize.
The company's filings list $1.49 million as the maximum amount to be paid out, "in the unlikely scenario" that all 33 key employees were terminated without good cause.
WCI notes that the company already has suffered a key personnel loss with the recent resignations of John P. Jacunski, former vice president and chief financial officer, and Tom Bartel, a former metallurgical department employee.
Judge Bodoh also will consider at the hearing the company's proposal that all claims in its bankruptcy case be filed by Jan. 30, 2004.
Background
WCI filed for protection from its debtors under Chapter 11 of the federal bankruptcy code Sept. 16, listing $352.5 million in assets and $643.3 million in debts. It continues operating.
The company spent months trying to resolve its financial problems, and court records indicate it spent more than $3.04 million from January through mid-September on debt counseling and bankruptcy-related fees to attorneys, financial advisers and investment bankers.
Fees WCI paid to Squire Sanders & amp; Dempsey, the Cleveland law firm representing the company in its bankruptcy case, already totaled $610,925 by the date the bankruptcy petition was filed.
CIBC World Markets, an investment bank, was paid $757,900; investment banker Jeffries and Company Inc. was paid $525,437; and Metal Strategies, a West Chester, Pa., company specializing in strategic planning and business plan development for metals businesses, billed WCI for $325,649.
Other law firms submitting bills include Kramer, Levin Naftalis & amp; Frankel, a New York City law firm that charged the company $460,449, and Cadwalader, Wickersham & amp; Taft, another New York firm, that billed $361,039.
vinarsky@vindy.com