Weirton obtains court approval for disclosure statement, to pay for trustee's financial advisor

By Carlise Newman

Chicago, Nov. 17 - Weirton Steel Inc. obtained court approval for its disclosure statement from the U.S. Bankruptcy Court, Northern District of West Virginia, and the confirmation hearing was fixed for Dec. 16.

The court also approved payment of costs of a financial advisor following a request from J.P. Morgan Trust Co. as indenture trustee and the ad hoc committee of senior secured noteholders.

The payment will come from increasing their carve-out under the company's debtor-in-possession financing to cover costs for a financial advisor.

The payment will cover the committee's professional fees, plus 25% of the fees and expenses incurred by Imperial Capital LLC and Hatch Consulting as financial advisors retained by the holders committee through Dec. 31.

After that payment of the fees will be contingent on the prior written consent of the official committee of unsecured creditors and the agent.

Weirton had previously said it was inappropriate as a matter of law to pay costs of a financial advisor in these circumstances.

The Weirton, W. Va.-based steel company had objected that there was little room in its restructuring expense covenants for payments to another professional, as it pays the fees of, among others, its bankruptcy counsel, its corporate counsel, its financial advisor, its investment banker, counsel to Fleet Capital Corp., Fleet's financial advisor and counsel to its creditors committee.

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