Bankruptcy Judge OKs Weirton Settlement

[AP / VICKI SMITH, Associated Press Writer]

MORGANTOWN, W.Va. (AP) -- A group of creditors who stood to
collect only $20 million from the sale of bankrupt Weirton Steel
Corp. will get about $30 million under a settlement approved
Thursday by a federal bankruptcy judge.
The decision clears one of the last major obstacles to the
$237.5 million sale of the company to Ohio's International Steel
Group.
"I think it's fantastic. You all were able to come together
and get a deal," Judge L. Edward Friend II said.
Friend approved the deal between Weirton and the Informal
Committee of Secured Noteholders following a brief hearing in
Wheeling.
ISG had agreed not to close the sale until May 17.
The noteholders will get the $20.4 million they already
expected from the sale, plus up to $9.6 million for various expenses
they have incurred, including fees for financial advisers, lawyers
and banks.
In addition, they could get another $6 million when the
judge distributes the proceeds to various creditors, company
spokesman Gregg Warren said.
The noteholders declined comment. They had tried repeatedly
to stop ISG's purchase, claiming it undervalues Weirton's assets and
offers little repayment on what they say is a $145 million debt.
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. As part of the agreement, they will drop any
further opposition.
The transaction would enable ISG to surpass Pittsburgh-based
U.S. Steel as the nation's biggest steelmaker.
Still unresolved as of Thursday 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.