YOUNGSTOWN CSC's liquidation becomes official Chapter 7
Attorneys said the bankrupt steelmaker still owes its bank lenders more than $80 million.
THE VINDICATOR, YOUNGSTOWN
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- The remains of bankrupt CSC Ltd. were sold at auction months ago, but a federal bankruptcy judge made the company's demise official Thursday by converting its bankruptcy case to Chapter 7, the final liquidation phase.
Judge William Bodoh had already approved an agreement between CSC, its bank lenders and other creditors in February which set today as the deadline for converting the steelmaker's case to Chapter 7.
The next step, according to CSC legal counsel Atty. Matthew Goldman, is the appointment of a trustee by the U.S. Trustee's office. The trustee, usually an attorney or accountant, will oversee the liquidation of the remaining assets, replacing a skeleton crew of CSC managers.
Still owed: Goldman, who represents the Cleveland law firm of Baker & amp; Hostetler, said CSC's bank lenders are still owed more than $80 million. The trustee appointed to oversee the case will be working to collect on outstanding accounts that are still owed.
Before the Chapter 7 conversion, Judge Bodoh approved payment of about $70,000 in legal fees for Baker & amp; Hostetler, which has been representing CSC since it filed for Chapter 11 bankruptcy protection in January 2001.
The payment brings Baker & amp; Hostetler's total for fees and expenses to about $1.19 million.
Judge Bodoh delayed ruling on another request for $46,500 in legal fees and expenses filed by Atty. John Steinhauer of Akron.
Steinhauer said he had been corporate counsel for CSC since the company was organized in 1995, and he stayed on during the bankruptcy to assist Baker & amp; Hostetler.
Opposed payment: Lenders' attorney James Ehrman opposed the payment, however, arguing that Steinhauer's services were never included in the budget and that the necessary court papers were never filed for him.
CSC, once a special steel bar maker and the fourth largest industrial employer in Mahoning, Trumbull and Columbiana counties, stopped steel production last April. Most of the plant was sold at auction in October after an unsuccessful, yearlong search for a buyer to keep the mill operating.
The closing idled about 1,375 hourly and salaried workers.
A group of Ukrainian investors calling itself Warren Steel LLC paid $6 million for two of the largest and newest pieces of steelmaking equipment, the continuous caster and the melt shop. The same group later bought the real estate for an additional $1.2 million, but has not announced a decision on whether it will resume steelmaking at the site.