BANKRUPTCY COURT Delay in decisions keeps WCI afloat

The judge's action ensures the steelmaker a continued supply of iron ore.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- WCI Steel won the first two rounds Thursday in a courtroom battle to keep operating while it works to reorganize its debts and emerge from Chapter 11 bankruptcy protection.
The Warren steelmaker faced challenges from two iron ore suppliers and a petroleum tank manufacturer, both wanting special assurances of payment or the right to reclaim their merchandise.
Hearing the motions in U.S. Bankruptcy Court, Judge William Bodoh put off acting on the companies' requests, thus allowing WCI to continue making steel.
Cliffs Northshore Mining Co., based in Minnesota, and its parent company, Cleveland Cliffs Mining Co., based in Cleveland, filed court documents stating they have not been paid for about $4.4 million worth of iron ore they produced for WCI's steelmaking process.
The ore is still sitting at a seaport, however, because shipping company Seaway Marine Transport of Ontario has stopped transporting materials to WCI.
Seaway also filed a motion asking Bodoh to authorize WCI to start paying installments on its $405,568 bill before it will resume shipping.
Christine Murphy Pierpont, an attorney with the law firm of Squire, Sanders & amp; Dempsey of Cleveland, which represents WCI, told Judge Bodoh the company had to make a deal with Seaway to get shipping resumed immediately because it needs the raw material to produce steel.
WCI asked the court to approve the deal, but the mining companies filed an objection, arguing their right to reclaim the iron ore or to be paid for it should supersede Seaway's claim.
Judge Bodoh rejected the objection and agreed to let WCI start paying Seaway about $100,000 a month on its bill so that shipping can resume. The mining companies' claims will be considered later, he said.
Request about tank
In another matter, Stanwade Metal Products, based in Hartford, said it delivered a 5,000 gallon petroleum tank worth $9,500 to WCI on Sept. 15, the day before the company filed its Chapter 11 petition.
Stanwade's motion said the company sent WCI reclamation notices, but the company has not returned the tank. Fearing that Stanwade will not be paid for the tank, the company asked the court for a restraining order to block WCI from using the tank, for assurance it will be paid, or for the right to reclaim the tank.
Pierpont said the company needs the tank for an environmental project and would "run afoul" of environmental regulators if it can't be used. She said it would take too long to order a replacement tank.
Bodoh postponed acting on Stanwade's requests but agreed to discuss the matter further at a hearing set for 9 a.m. Thursday. That hearing is to allow WCI to establish a financing arrangement, called Debtor In Possession, or DIP financing, to fund its operations.
vinarsky@vindy.com