Bankruptcy judge lets Copperweld spin off

YOUNGSTOWN (AP) -- A judge has cleared the way for Copperweld Corp., the last significant steel part of LTV Corp., to emerge from bankruptcy as a separate company in December.
U.S. Bankruptcy Judge William Bodoh said Monday the tubular-steel and metallic-products company can emerge from LTV's Chapter 11 bankruptcy as a separate entity.
Dennis McGlone, president and chief operating officer of Pittsburgh-based Copperweld, said it will operate 13 plants. It has 2,300 employees in North America and plans no layoffs.
A group of lenders led by GE Capital Corp. will assume about $155 million in debt and own more than 80 percent of the new Copperweld under the reorganization plan, said Heather Lennox of Jones Day, the lead law firm for LTV. Existing Copperweld management will own the balance.
The plan leaves little for holders of $586 million in unsecured notes. They will recover about 0.6 percent of their claims, said Lisa Beckerman, a lawyer for some of the noteholders at Akin Gump Strauss Hauer & amp; Feld LLP in New York.
The deal will raise $12 million to $15 million from asset sales, Beckerman said. But the noteholders must share that amount with trade creditors, who have claims totaling $20 million, and the Pension Benefit Guaranty Corp., which has a $1.5 billion claim.
LTV gets no cash in the deal.
"Because the amount of secured and unsecured debt of the Copperweld business exceeds the value of that business and all of its assets, LTV equity in the Copperweld business is worthless," said Frank Filipovitz, vice president of human resources.
Judge Bodoh's order leaves LTV in the final stages of complete liquidation -- sorting out what money has been collected from the asset sales and how to disburse it to claimants.
LTV, which filed for bankruptcy protection in December 2000, sold most of its LTV Steel operations to WL Ross & amp; Co. in February 2002, which formed International Steel Group.
A coke plant in Warren, formerly owned by LTV, now is being operated by ISG. LTV also had a pipe mill in Youngstown, which employed 80. That was sold to Maverick Tube, which closed the mill earlier this year.