Creditors Clear Sale of Weirton Steel

[AP / VICKI SMITH, Associated Press Writer]

MORGANTOWN, W.Va. (AP) -- The sale of bankrupt Weirton Steel
cleared a major obstacle Wednesday as the last remaining creditors
signed off on a deal to settle their debts.
Details of the settlement will be revealed Thursday in U.S.
Bankruptcy Court in Wheeling, where Judge L. Edward Friend II must
review the terms. His permission would set the stage for Ohio's
International Steel Group to close the $237.5 million deal within
two weeks.
"I'm pleased this issue has been resolved. We've just
cleared one of the remaining hurdles in completing this sale," said
D. Leonard Wise, Weirton's chief executive. "The finish line is
clearly in sight. Dragging this matter through courts would have
been of no value."
The Informal Committee of Secured Noteholders had tried
repeatedly to stop ISG's purchase, claiming it undervalues Weirton's
assets and offers creditors too little repayment.
The creditors tried to outbid ISG but lost that battle in
Bankruptcy Court. They then filed a motion in U.S. District Court to
stop or delay the sale.
The noteholders say they are owed $145 million but stood to
receive only $20 million from the sale.
The transaction would give ISG more production capacity than
any other steelmaker in the nation, surpassing Pittsburgh-based U.S.
Steel.
Still unresolved as of Wednesday was self-insured Weirton's
obligation to the state Workers' Compensation Commission.
The state has said the sale could leave a workers'
compensation deficit as large as $80 million for large employers who
pay costs for their own injured workers. Without state funding,
those businesses must cover that deficit, which could raise their
premiums as much as 50 percent.
Company spokesman Gregg Warren said negotiations on a
possible settlement with the state are continuing.