Weirton, creditors tentatively settle fight over sale to ISG
May 15, 2003 at 9:29 PM EST - Updated June 21 at 3:31 PM
By VICKI SMITH, Associated Press Writer
WHEELING, W.Va. (AP) - Weirton Steel Corp. struck a tentative settlement Friday with a group of creditors that have tried to stop the sale of the company to Ohio's International Steel Group.
The settlement, which still must be approved by a U.S. Bankruptcy Court judge, would clear the way for completion of the sale as early as next week.
Weirton Steel spokesman Gregg Warren would not reveal the amount the noteholders would receive but acknowledged it would be more than the $20 million they would get from the sale.
The Informal Committee of Secured Noteholders says the creditors are owed $145 million.
Warren said the settlement figures would be revealed in bankruptcy court.
"We don't want to drag this out," Warren said. "We want the sale to go through."
The settlement averted a hearing scheduled Friday morning in U.S. District Court on the noteholders' petition to slow or stop the sale. The noteholders contended they could recoup their losses and serve other creditors better than ISG by hiring managers to run Weirton as a private, stand-alone company.
The case now goes back to bankruptcy court.
A message seeking comment was left with ISG, based near Cleveland.
U.S. Bankruptcy Judge L. Edward Friend II approved the $237.5 million deal with ISG on April 22, then refused earlier this week to delay completion of the sale beyond the 10 days required by law.
That 10-day period expires at midnight Monday.
Under a time line presented Friday morning to U.S. District Court Judge Frederick P. Stamp Jr., the automatic delay of the sale would expire at midnight Wednesday, giving attorneys for the creditors time to have of their clients sign off on the deal.
Noteholders' attorney Lisa Beckerman said her clients have accepted the tentative agreement but will meet Tuesday to review the details.
"I'm cautiously optimistic I'll be able to achieve all this within the time frame," she told Stamp.
Mark Glyptis, president of Weirton's 3,000-member Independent Steelworkers Union, said he was pleased by the settlement.
"It's one step closer to closure," he said. "I believe it's going to get resolved. The demeanor of the parties suggests resolution."
One issue remains unresolved: self-insured Weirton's obligation to the state Workers' Compensation Commission, which also has challenged the sale. The commission has said the sale could leave a workers' compensation deficit as large as $80 million for large employers that pay costs for their injured workers.
Without state funding, those businesses must cover that deficit, which could raise their premiums as much as 50 percent. Warrren said Weirton is negotiating with the state to resolve the issue.
If ISG can close the deal, it would become the largest integrated steelmaker in the nation, surpassing Pittsburgh-based U.S. Steel.
(Copyright 2004 by The Associated Press. All Rights Reserved.)