WCI STEEL Judge wants to rule on one plan

The judge has heard testimony on competing plans in the bankruptcy case.
WARREN -- The federal judge presiding over WCI Steel's fight to emerge from bankruptcy wants the company and a competing group of creditors to come up with one consensual operating plan.
Judge Marilyn Shea-Stonum in Akron has issued an opinion to attorneys representing WCI and its rival group of bondholders vying for ownership of the mill. The judge has already heard testimony on their two competing plans for operating the company and had been expected to approve one of the two.
Her opinion is not a judgment; it provides guidance that WCI's lawyers had requested.
Tim Roberts, company spokesman, said Judge Shea-Stonum was unsatisfied with aspects of both plans.
"She wants one plan before her," he said Thursday.
That would mean agreement among WCI Steel, creditors and noteholders, the United Steelworkers of America and the Pension Benefit Guarantee Corp.
"It is do-able," Roberts maintained. "We will work in good faith with the noteholders to reach a consensual plan."
He declined to discuss specifics of the judge's 58-page opinion, except to say that it sets parameters that the steelmaker's lawyers need to look over. The judge set a Jan. 17 moratorium on filings to the court, unless they are consensual.
Rival plans
WCI employs 1,750 workers. The Warren steelmaker filed for Chapter 11 bankruptcy protection more than a year ago.
WCI's own reorganization plan would allow the steelmaker to emerge from bankruptcy protection, reorganize its debts and continue to operate under its present owner, New York-based Renco Group.
Under the company's plan, Renco would contribute $35 million in new money and would assume ultimate responsibility for WCI's pension plan should the company be unable to afford its cost. WCI's current management team would remain largely intact under the plan.
A group of creditors, which together holds $324 million of WCI's bonds secured by its property, plant and equipment, also wants to buy and operate the mill. The bondholders would invest an additional $40 million in WCI, but they would not assume responsibility for the pension plan, maintaining that obligation remains with Renco.
Renco Group and its official committee of unsecured creditors have opposed the bondholders' plan. The unsecured creditor committee also includes: United States Steel Corp., which supplies coke for steel production; FirstEnergy Corp., which supplies its electric power; Cleveland Cliffs Inc., which provides iron ore pellets; Oglebay Norton Marine Service Co., a shipping company; and Carmeuse North America, a lime and limestone supplier.
Their motion argues that the company's reorganization plan is in its best interest for a number of reasons, including WCI's agreement to increase some of its payments to creditors.
Most important, they say, the company's plan has the backing of the United Steelworkers of America, which represents about 1,330 WCI hourly employees. USWA Local 1375 has OK'd an agreement with WCI, a key strength in the company's plan because the bondholders do not have a negotiated agreement with the union.