BANKRUPTCY COURT Slow going in WCI case
Testimony continues next week, and the mill owner is to take the stand Sept. 13.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
AKRON -- Peter Toto likes to dream about kicking off his retirement with a trip to Italy. Maybe he'd take in some other European destinations, too.
After 41 years working at WCI Steel in Warren the steel mill motor inspector said he's ready for a break.
But Toto and about 250 other would-be retirees at WCI will have to keep their plans on ice for a while longer.
Attorneys representing WCI, its multimillionaire owner Ira Rennert, and a rival group of bondholders vying to buy the Warren steel mill ran out of time Friday after five full days of testimony in U.S. Bankruptcy Court here.
Toto attended the hearing, one of several WCI employees who spent time in the courtroom this week.
Judge Marilyn Shea-Stoner will schedule additional hearing time next Friday and Sept. 13 before she decides whether to accept one of the competing plans or to reject both.
A third plan filed this week by two New York investment groups, D.E. Shaw and MIC Capital, could be considered if the WCI and bondholder plans fail. All three plans call for continuing operations at WCI.
Rennert, whose plan for the company includes an offer of $35 million in new operating cash for WCI and an additional $15 million in 2006, is expected to testify Sept. 13. He also has agreed to assume the cost of the pension plan and to back a new pension plan for current WCI workers.
One advantage the WCI-Rennert plan has over the lenders is a four-year collective bargaining agreement which members of United Steelworkers of America Local 1375 ratified in July. The bondholders say they would plan to negotiate an agreement with the union if their plan is approved.
The agreement would take effect immediately if Judge Shea-Stoner confirms the WCI-Rennert plan.
It includes pay raises ranging from 94 cents to $1.28 per hour over the life of the agreement, a $50,000 retirement incentive for the mill's 250 most senior workers, and continued pension and health-care benefits.
Toto, who started at the mill when he was 19, is among those who would qualify for the incentive.
WCI also expects the agreement to result in substantial production cost savings if the contract takes effect. It reduces employee numbers by attrition and reduces the number of job classifications to improve efficiency.
Mike Rubicz, president of Local 1375, said the slow pace of the bankruptcy court hearings has been frustrating for workers and WCI officials alike. The confirmation hearings originally started in July but were rescheduled to resume Monday after two days of testimony because attorneys said they needed more time.
For veteran employees like Toto, he explained, the delays mean putting off retirement plans. Other workers are nervous about the uncertainty of ownership and how it may affect their futures, he said.
Edward Caine, WCI's chief restructuring officer and former president, testified earlier in the week that the uncertainty also has affected the company's contracts with customers and vendors. Some are reluctant to approve contracts with the steelmaker because of its uncertain future, he said.
WCI filed for Chapter 11 bankruptcy protection in September 2003. With 1,700 employees, it is the Mahoning Valley's third-largest industrial employer.