Sixteen CSC workers will be paid bonuses for collecting $29 million in accounts receivable after the mill closed down.
THE VINDICATOR, YOUNGSTOWN
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- Lending institutions that are still owed tens of millions of dollars by bankrupt CSC Ltd. have agreed to pay the defunct steel company's lawyers about $1.1 million for handling its bankruptcy case.
Judge William Bodoh of the U.S. Bankruptcy Court in Youngstown approved payment of $621,411 in fees and expenses to Baker & amp; Hostetler, the Cleveland law firm representing CSC, to cover its work from May through December 2001.
Matt Goldman, an attorney for the firm, said the payment is in addition to about $500,000 it received for the first four months of 2001. CSC filed for Chapter 11 bankruptcy protection in January of that year.
The legal payment was a compromise because it is about $42,000 less than Baker & amp; Hostetler's original request for the seven months of service. Goldman said the firm will likely approach the court for fee and expense payment one more time when a trustee is appointed to take over the final legal details in CSC's bankruptcy case.
Judge Bodoh also approved payment of $60,000 to Gardner, Carton & amp; Douglas, a Chicago firm representing CSC's unsecured creditors, with $10,000 of the total to be paid by Baker & amp; Hostetler. American Express, the creditors' financial adviser, will be paid $5,000.
Compromise on bonuses: In a related matter, the judge approved a compromise reached by CSC and its lenders to pay bonuses to 16 salaried and hourly employees who helped the company collect $29 million in accounts receivable after the steel mill closed down.
Lenders agreed to set aside a pool of $100,000 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 company and lenders had talked about a cap of $250,000 for the bonuses when the plan was first proposed last year, but lenders later asked for a smaller bonus pool.
Out of work: 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.
Lenders had agreed 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 bought steel on credit.
Caiazza said the team surpassed their 80-percent minimum. The remaining $5 million owed CSC is in litigation, he said.
Warren Steel LLC, a group of foreign investors that bought the real estate on which CSC stands, is still in what Caiazza called "an evaluation stage."
The investors paid $1.2 million for the property and $6 million for CSC's continuous caster and melt shop, but Caiazza said they have not yet decided whether to move the equipment to another location or to try to start a new steelmaking operation on the Champion Township site.