WCI STEEL EPA: Reorganization plans need more details

The EPA wants assurances that environmental obligations won't be ignored.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- If WCI Steel wants the blessing of the federal Environmental Protection Agency, the steelmaker will have to make some changes in its plan to reorganize and emerge from Chapter 11 bankruptcy protection.
The EPA is also calling for changes in a competing plan submitted by a group of secured bondholders who want to buy and operate WCI.
Judge Marilyn Shea-Stonum will consider the two plans at a hearing set for 8:30 a.m. Tuesday in U.S. Bankruptcy Court in Akron.
Environmental regulators argue, in objections filed this week in bankruptcy court, that neither WCI's plan nor the secured bondholders' plan provides enough detail on how the revived steel mill would meet its environmental obligations.
The EPA is demanding that changes be made in the plans to show how much money would be spent on those obligations and where that money would come from.
Both plans should also include a statement promising that the reorganized company will comply with WCI's existing environmental obligations, the EPA argues.
WCI spokesman Tim Roberts declined to comment on the EPA's objections, saying the company will respond in court.
Other issues
WCI has two environmental issues pending with the EPA, according to court filings.
The EPA ordered the steelmaker last year to remove oily wastes from some ponds, a lagoon and other containment areas where the U.S. Fish and Wildlife Service found dead birds and bats submerged in oil.
Regulators determined that WCI's handling, storage, treatment, transportation or disposal of solid waste at the locations cited may present an imminent and substantial danger to health or the environment. The EPA subsequently ordered WCI to stop using the areas to manage oily waste or, in some cases, to install netting over them to protect birds and other wildlife.
The EPA wrote that WCI is also obligated, under a court-approved 1995 consent decree, to conduct groundwater monitoring related to the closure of two waste containment ponds and to take other corrective actions there.
EPA filings say WCI is liable for payment of civil payments because it has not completed some required environmental work at the ponds.
WCI's reorganization plan states that "a reserve" has been established for environmental expenses, but does not specify an amount or how it will be allocated, the EPA says.
Regarding the bondholders' plan, the EPA argues it fails to show whether the newly formed company would have the financial ability to comply with applicable environmental law.
The bondholders' plan also mentions setting aside an amount to meet environmental obligations, the EPA states, but fails to specify an amount or how it would be spent.
WCI's creditors will receive mailed ballots and information on both plans soon after next week's hearing, if the judge allows both to go forward. A confirmation hearing, at which the judge will learn results of the vote and will consider confirming a plan, is set for July 21 and 22.
vinarsky@vindy.com