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Sharon Steel Lays Off 500, Misses Payment

October 20, 1992

SHARON, Pa. (AP) _ Debt-laden Sharon Steel Corp. said Monday it was laying off another 500 workers, bringing to about 1,300 the number of employees let go this year.

The company had about 2,700 people on its payroll in May. About 300 were laid off during the summer and another 500 were laid off in September.

Last week, Sharon Steel idled its blast furnace and shut down its two electric furnaces. The furnaces account for all of the company’s in-house steel-making capacity.

Separately, Sharon Steel said it defaulted on a $5 million mortgage agreement, according to a lawsuit filed in Mercer County Common Pleas Court. In a civil suit filed last week, Continental Bank of Chicago claims that a payment of $933,827 due last June 30 was not made.

Sharon Steel and the bank agreed on July 15 that the company would make three equal payments of $311,027. Those payments were due July 21, Aug. 24 and Sept. 24. The suit claims Sharon Steel failed to make those payments. The bank says Sharon owes it $4.46 million.

Malvin Sander, senior vice president and general counsel of Sharon Steel, said the debt was inherited when the company emerged from bankruptcy protection in 1990.

Sharon Steel has been trying to complete a deal with the Pennsylvania School Employees Retirement System, which tentatively approved a $30 million investment in the steelmaker.

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