Delay for Weirton Bankruptcy Plan Granted
MORGANTOWN, W.Va. (AP) _ A federal bankruptcy judge indefinitely postponed a confirmation hearing on Weirton Steel Corp.‘s reorganization plan Monday after company officials said the pressure to win creditors’ approval by Dec. 31 has subsided.
Weirton Steel had an ambitious timetable, with a confirmation vote set for Dec. 16, because the federal Emergency Steel Loan Guarantee Program was set to expire at the end of the month.
But in a joint statement Monday, Sen. Robert C. Byrd and Rep. Alan B. Mollohan, both D-W.Va., said a key House-Senate negotiating committee has recommended to Congress that the steel loan program be extended two more years. Though there is no guarantee, both are optimistic that legislation will pass.
The loan board has tentatively agreed to guarantee 88 percent of a $145 million loan for Weirton Steel through Fleet Capital Corp. of Chicago. And since President Bush lifted tariffs on some imported steel last week, the survival of that program is more critical than ever, the legislators said.
In U.S. Bankruptcy Court in Wheeling, Weirton Steel attorney Mark Freedlander said the company has made significant progress but realized last week that ``year-end emergence just plain and simply wasn’t going to happen.″
Among other things, Weirton still needs a new labor contract with the 3,000-member Independent Steelworkers Union, he said. It’s also still resolving disputes with several creditors.
Now, failure to confirm a plan by Dec. 31 apparently ``will not be fatal to Weirton’s ability to emerge on a stand-alone basis,″ Freedlander’s motion said.
Additional time also will let Weirton continue to explore other alternatives, including a sale, he said.
Judge L. Edward Friend said, ``With the amount of time you had and the issues you had, it would have surprised a whole lot of people if you could have gotten them done by December.″
Also Monday, Weirton announced it’s imposing a $25 per ton surcharge on all shipments because of what it called unprecedented increases in the costs raw materials, especially natural gas.
The charge will apply to all products and customers, and will last from Dec. 15 to Jan. 31. The company will notify customers by Jan. 16 if it needs to continue the charges through February.
Despite the lifting of tariffs, Weirton officials are not worried about competing against a new surge of imported steel.
China has been consuming more steel than it can produce, so that market should continue to be attractive to foreign producers, spokesman Gregg Warren said.
Improvements in both the U.S. economy and those of other nations also have increased the global demand for steel, Warren said, and other U.S. producers are still expected to raise prices in January.
Weirton Steel, which employs about 3,425, filed for Chapter 11 protection in May after losing money for five years. Weirton is the nation’s fifth-largest integrated steel producer and its No. 2 producer of tin.