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U.S. BANKRUPTCY COURT Groups vying for WCI will sum up plans Oct. 25



Published: Fri, October 8, 2004 @ 12:00 a.m.



By CYNTHIA VINARSKY

VINDICATOR BUSINESS WRITER

WARREN -- Workers at WCI Steel have a few more weeks to wait before the fate of the Warren steelmaker is decided by a U.S. bankruptcy judge in Akron.

After two postponements, final arguments originally set for this week have been rescheduled for 9:30 a.m. Oct. 25 before Judge Marilyn Shea-Stonum.

G. Christopher Meyer, a WCI attorney, said it should take no more than a day for lawyers to sum up the two competing plans for running the company. WCI and its multimillionaire owner Ira Rennert are in competition with a group of bondholders for the right to buy and operate the mill.

Meyer said he can't guess how long it might take Judge Shea-Stonum to approve one of the plans.

There are other options, as well.

The judge has repeatedly urged the two sides to negotiate a compromise solution out of court instead of leaving the matter in her hands. And there's still a possibility Judge Shea-Stonum could reject both plans, opening the door for a third contender's proposal to be considered.

MIC Capital Inc. and D.E. Shaw, both New York-based investment groups, submitted a joint plan for buying and operating the company on Aug. 27, months after the court-established deadline. For that reason, the MIC Capital-Shaw offering is on hold and not likely to come into play unless the other two plans fail.

Postponements

Meyer, part of WCI's legal team from the Cleveland law office of Squire Sanders, said final arguments in the case were originally scheduled Thursday but were postponed to Oct. 18 because transcripts of previous hearings were not received in time.

Information from the transcripts must be included to document paperwork attorneys file for the judge.

A second postponement came when an attorney working for the bondholders was seriously injured in a traffic accident in Florida. Jim McCarroll of the New York-based firm of Kramer Levin is recovering at home, Meyer said, but he had to be replaced and the new attorney brought up to speed on the case.

Meanwhile, WCI spokesman Tim Roberts said the mill is operating at full capacity with no layoffs and still has a strong order book, despite repeated delays in its Chapter 11 proceedings.

Customers and suppliers have been patient and supportive, he said, and the company hasn't lost orders because of court postponements.

Labor contract

WCI officials and Mike Rubicz, president of United Steelworkers of America Local 1375 which represents 1,330 hourly WCI workers, have repeatedly called for a speedy resolution of the bankruptcy case.

The union has ratified a contract with WCI which would take effect immediately if the judge approves the plan submitted by the company and its owner Rennert. The pact includes pay raises and a $50,000 retirement incentive for the mill's 250 most senior workers, but officials believe it will cut WCI's operating costs substantially by reducing employees and combining jobs to improve efficiency.

The bondholders have said they will try to negotiate a comparable contract with the union if their reorganization plan gets court approval.

vinarsky@vindy.com




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