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WCI Steel emerges from Chapter 11 bankruptcy
By Caroline Salls
Pittsburgh, May 2 - WCI Steel, Inc. emerged from Chapter 11 bankruptcy when its plan of reorganization took effect Monday, according to a filing with the U.S. Bankruptcy Court for the Northern District of Ohio.
According to the filing, the company began distributing cash and securities Monday, except to unsecured claims creditors, who will receive their cash and common stock on the May 31 initial distribution date.
The reorganization plan includes parent Renco Inc.'s agreement to assume the company's pension plan. As part of a negotiated settlement, the reorganized WCI agreed to contribute $15.3 million to the plan upon the steelmaker's emergence from Chapter 11 and another $5 million in each of the next two years.
As plan sponsor, Renco will be responsible for paying all future contributions to the plan.
As previously reported, the consensual plan is based on the plan previously filed by WCI's secured noteholders, under which the noteholders will receive all of the new notes and virtually all of the equity of the reorganized company on account of their claims and their agreements to invest $50 million in the reorganized company.
Unsecured trade creditors will receive between 20% and 22% of their claims in cash.
The reorganized company will issue $100 million 8% secured notes and 9 million shares of preferred and common stock under the plan.
The noteholders' plan also calls for implementation of a new collective bargaining agreement and retiree medical plan negotiated by the United Steelworkers.
The collective bargaining agreement was ratified last week.
The plan of reorganization was confirmed on March 29.
The Chapter 11 case number for WCI, a Warren, Ohio-based steel company, is 05-81439. It filed for bankruptcy on Sept. 16, 2003 in the U.S. Bankruptcy Court for the Northern District of Ohio, and its case was transferred to the court's Akron division on Jan. 4.
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