WARREN CSC asks judge to approve bonuses for workers who collected payments
The bankrupt steelmaker also intends to turn over a $1.2 million lawsuit settlement to its lenders.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- CSC Ltd. is asking a federal bankruptcy court judge to approve bonus payments to 16 salaried and hourly employees who helped the company collect $29 million in accounts receivable after the steel mill closed down.
Under a compromise reached by CSC and its lenders, a pool of $100,000 would be set aside to pay the bonuses, along with January 2002 salaries and related taxes for the steelmaker's two remaining employees.
Don Caiazza, a former CSC president and one of the two still on the company payroll, said most of the money would go to the bonuses. He said the $100,000 is less than the amount discussed when the bonus plan was first approved.
Once the fourth-largest industrial employer in the Mahoning Valley, CSC filed for Chapter 11 bankruptcy protection in January 2001 and stopped making steel in April, idling about 1,275 workers. The company was unable to find a buyer for the steel bar mill, so the facility was sold piecemeal at an auction in October.
Incentives: Lenders agreed last year to pay collection incentive bonuses to a group of employees if they could succeed in collecting at least 80 percent of the $34 million owed the company by customers who had purchased steel on credit.
Collection becomes more difficult when a company stops production, Caiazza explained, because customers are no longer concerned about paying their bills to assure a continued supply. The collection team worked with customers to resolve disputes and other problems which, in some cases, were holding up payment.
Caiazza said the team surpassed their 80-percent minimum. The remaining $5 million owed CSC is in litigation, he said.
The company also filed a motion informing Judge William Bodoh that CSC recently won a $1.2 million settlement in a class action lawsuit against a graphite electrode manufacturer. The proceeds will be turned over to the company's lending banks, which are still owed "tens of millions" of dollars, Caiazza said.
CSC joined a group of steel companies to file a price-fixing lawsuit against several electrode manufacturers, he said. Electrodes are used in melting steel in electric arc furnaces.
Caiazza is working with a group of foreign investors who paid $1.2 million for the real estate where CSC once operated. He said the group, which calls itself Warren Steel LLC, is still studying the site and has not made a decision on whether to start a steelmaking operation there.