Judge prepares to choose winner in bid for company

Bondholders told the judge their offer for Weirton Steel is the best.
WHEELING, W.Va. (AP) -- Weirton Steel Corp. hasn't turned a profit since 2001 but finds itself worth fighting for, with one potential buyer claiming it's worth up to $450 million and another offering half that much.
The stakes were high as a U.S. Bankruptcy Court judge prepared to choose a winning bid for the company today.
For International Steel Group, willing to pay $237 million, Weirton would be more than just another trophy in a rapidly filling case: It would make the 2-year-old, Cleveland-based upstart the nation's largest integrated steelmaker.
For a group of creditors challenging the sale, Weirton is a chance to minimize losses. If its $364 million offer were to win, the Informal Committee of Senior Secured Noteholders could recoup some of the $145 million it says it's owed. If not, it will get $20 million.
Financial adviser Tom Thompson, hired by the creditors, argued during a hearing on the sale Wednesday that Weirton might have gotten more money for its mill if had marketed more aggressively.
When it's common knowledge a company is struggling, "You have to create an illusion of value," he told Judge L. Edward Friend II. "You've got to create a sales process. That never happened."
The mill's niche is tin: Weirton is the nation's second-largest producer, with a 25 percent share of the market.
Counterargument
But Scott King, senior managing director of Cleveland-based FTI Consulting, challenged Thompson's claim that the mill is worth as much as $450 million.
"In my opinion, the value the note-holders have come up with is not rational," he said, suggesting a savvy buyer like ISG could buy three or four mills for that price.
King also testified that steel companies have recently sold to buyers who didn't submit the highest bid. Last year, Pittsburgh-based U.S. Steel prevailed in the battle for National Steel, even though AK Steel's bid was higher.
"If the lowest bid is the one that can close and the highest bid cannot close, it's a test of fair-market value," he said.
Weirton Steel chose the lower bid because its managers and directors believe ISG can close the deal and provide a secure future.
They also question the note-holders' ability to complete the sale. About $130 million of their bid is in credit, meaning they are applying money Weirton owes them to the selling price.
Among the issues the judge will consider are whether Weirton chose ISG's bid using reasonable business judgment and whether the deal adequately serves creditors.