Weirton Steel Creditors May Get $30M

[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. would get about $30 million under a settlement that has been
presented to U.S. Bankruptcy Court.
Judge L. Edward Friend II was expected to rule by day's end
Thursday whether to approve the deal between Weirton and the
Informal Committee of Secured Noteholders. Approval would clear one
of the last major obstacles to the $237.5 million sale of the
company to Ohio's International Steel Group.
Under the agreement outlined in court documents, ISG agreed
not to close on the sale until May 17.
The noteholders would 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 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 U.S. industry
leader U.S. Steel in terms of production capacity.
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.