WCI STEEL Owner: Plan generous to lenders
WCI's owner expects to turn the business over to his son when he retires.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- WCI Steel's millionaire owner Ira Rennert has just one gripe about his plan to buy the Warren steel mill out of bankruptcy: He thinks it would pay too much to a competing lender group also vying to buy the company.
In a deposition filed in U.S. Bankruptcy Court in Akron, Rennert said that the secured bondholders deserve no more than $20 million to $25 million.
WCI's parent company Renco would pay $94 million under its plan to reorganize and continue operating the mill.
If the plant and property were sold, Rennert argued, it would probably go for about $20 million.
"That's what somebody would pay for it," he argued. "That's the real world. That's the real market."
Rennert's estimate is a long way from what the bondholders desire.
The lending group holds $324 million in WCI bonds secured by its plant, property and equipment and has argued in court that it should be paid at least three times what WCI is offering.
Rennert, who turned 70 in May, said in his deposition that he is not considering retirement from operating Renco, also parent to AM General in South Bend, Ind., U.S. Magnesium in Salt Lake City, and several other companies around the country.
Next in line
If and when he does step down, he said, Rennert plans to turn his business over to his son Ari Rennert, 25. He described his son as single, a resident of Manhattan, N.Y., and an investor in overseas equities that have no involvement in any of Rennert's businesses or investments.
G. Christopher Meyer, an attorney representing WCI in its Chapter 11 bankruptcy case, said Rennert's July deposition was filed in court as part of an effort to minimize the time needed for testimony. The reclusive New York financier has been in court several times but has not testified and has refused to comment to reporters.
By filing deposition transcripts in the court docket, Meyer explained, attorneys can provide Judge Marilyn Shea-Stonum with detailed information without taking up court time.
WCI's case already has dragged out several months past the company's original plan to emerge from bankruptcy in July.
The judge must decide whether to accept either the WCI-Rennert plan or the bondholders' plan for operating the Warren mill.
Closing arguments, set to begin at 9:30 a.m. Monday, are not expected to last more than a day, Meyer said. It is unclear how long the judge will take to make her decision, however, or how she will make it public.
A third proposal submitted by D.E. Shaw Laminar Portfolios LLC and MIC Capital Inc. will be moot, Meyer said, unless the judge rejects the other plans.
The two New York-based investment groups submitted a joint plan for buying and operating WCI in August, months after the first two plans were filed, and have requested a court hearing in early November.
Meyer said WCI and the bondholders are hoping the judge will postpone scheduling that hearing until she's decided whether to approve one of the pending plans.