U.S. BANKRUPTCY COURT WCI Steel's reorganization plan includes Renco support

The plan would allow WCI to emerge from bankruptcy protection in July.
& lt;a href=mailto:vinarsky@vindy.com & gt;By CYNTHIA VINARSKY & lt;/a & gt;
VINDICATOR BUSINESS WRITER
WARREN -- WCI Steel's parent company would invest another $35 million to keep the Warren steelmaker operating under a reorganization plan WCI has filed in United States Bankruptcy Court in Akron.
WCI attorney G. Christopher Meyer said the plan would likely allow the steelmaker to emerge from bankruptcy protection in July under its present owner, New York-based Renco Group.
That's about a month behind the company's June target date, but WCI spokesman Tim Roberts said it won't hamper plans for a crucial $13 million blast furnace relining. WCI has the borrowing capability to fund the project, he said, so it will go forward as scheduled starting June 4.
The reorganization plan, subject to approval by the bankruptcy court and a vote of creditors and other stakeholders, spells out how WCI plans to reorganize its debts.
Renco support
WCI's wealthy parent, which also owns AM General, maker of the popular Hummer vehicle line for General Motors, would be its sole shareholder under the plan. Renco would be issued $25 million in new common stock and $10 million in new preferred stock.
WCI's secured note-holders, a group of creditors already competing with the company for the right to buy and operate the Warren steel mill, may have the most to lose under the plan.
The lending group holds more than $300 million of WCI's secured notes. WCI proposes they be issued new notes worth $94 million and allowed a share of the $5 million that will be divided among hundreds of unsecured creditors.
Meyer said WCI believes it is "very likely" the secured note-holders will oppose the company plan. The note-holders and all other WCI creditors who are not getting full repayment of what they are owed under the plan will have the opportunity to vote on it.
The lending group has been circulating a copy of a competing reorganization plan proposal detailing how they would like to buy and operate the company.
The note-holders have not been able to submit that plan to the court, however, because WCI has that exclusive right, as the debtor, until mid-May.
Union approval
Union ratification of a tentative, 4 1/2-year contract agreement reached last week between WCI and United Steelworkers of America Local 1375 is crucial for the plan to go forward, the company said.
That agreement must be approved by WCI's 1,400 union-represented employees and by the bankruptcy court as part of the reorganization plan. It would take effect the day the company emerged from bankruptcy protection.
The note-holder group had said that USWA was also in talks with them regarding a tentative contract, but WCI president Patrick G. Tatom said Tuesday that the union "has pledged its support" for WCI's plan.
"This agreement is a significant milestone in our reorganization efforts and represents the strong commitment of The Renco Group to WCI's future," Tatom said.
Mike Rubicz, president of Local 1375, confirmed that the union is backing the company at this point.
Rubicz said informational meetings for union members and ratification voting won't be scheduled "for some time" because the international office of USWA has said it will take a number of weeks to put together brochures listing the contract details for members.
& lt;a href=mailto:vinarsky@vindy.com & gt;vinarsky@vindy.com & lt;/a & gt;