WCI objects to shipper's request for assumption or rejection of charter

By Caroline Salls

Pittsburgh, May 23 - WCI Steel Inc. objected to Oglebay Norton Marine Service Co., LLC's request that WCI assume or reject the self-unloading vessel charter between the two companies, according to a Monday filing with the U.S. Bankruptcy Court for the Northern District of Ohio.

Under the charter, Oglebay Norton provides all of WCI's shipping services for all of the iron ore shipped by Cleveland-Cliffs to WCI.

WCI contends that Oglebay Norton's motion is illegal because bankruptcy law gives a debtor until plan confirmation to decide whether to assume or reject a contract.

WCI said Oglebay Norton has failed to establish sufficient cause to warrant immediate assumption or rejection of the charter.

In its motion, Oglebay Norton asked that if WCI does not assume the charter, then Oglebay Norton could terminate the charter.

If the charter were assumed, WCI would be required to pay a $1.31 million cure amount in 12 monthly installments.

Oglebay also asked that, until a plan of reorganization is confirmed, WCI notify it within three days of termination of the Cleveland Cliff's pellet sales agreement. After that, Oglebay wants the authority to terminate the charter at any time.

Oglebay Norton said it wants to be sure WCI pays the cure amount and assurance that it will continue to perform under the charter to protect Oglebay Norton from "significant damages that would arise from unused shipping space if WCI fails to perform in the future."

The deadline for assumption or rejection would be 30 days after a court order becomes effective.

The Chapter 11 case number for WCI, a Warren, Ohio-based steel company, is 03-44662. It filed for bankruptcy on Sept. 16, 2003.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.