Sherwin Alumina secures bankruptcy court approval of closure agreement

By Caroline Salls

Pittsburgh, Nov. 4 – Sherwin Alumina Corp. received court approval to enter into a closure agreement with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO·CLC, according to an order filed Thursday with the U.S. Bankruptcy Court for the Southern District of Texas.

After announcing that it expected to cease most or all operations and permanently layoff all or substantially all of its employees, Sherwin said it began discussions with the United Steelworkers regarding the effects on bargaining unit employees and retirees of that decision.

Under the closure agreement:

• The company will continue the retiree benefits program through Dec. 31 and budget sufficient funds to pay wind-down claims. A VEBA Trust agreement will be modified to allow payments to be made for any eligible retiree health care expenses;

• Sherwin will pay $10,000 per family to the families of three employees who passed away during the lockout and did not receive life insurance benefits they otherwise would have been entitled to receive;

• The company will make a $2,000 severance payment to each eligible employee, funded by the current balance of a supplemental unemployment benefits trust fund, and make an additional contribution as needed to “true up” the balance of the trust fund;

• An unsecured claim filed by the union on March 10, 2016 concerning pending grievances and retiree benefit obligations will be reduced to $2 million from $38.3 million, with $2,000 each to be paid to five bargaining unit employees whose terminations were the subject of pending grievances, and the remaining proceeds to be contributed to the VEBA Trust; and

• All operations and bargaining unit work were scheduled to cease as of 6 p.m. ET on Nov. 4, and the lockout was scheduled to end at 5:59 p.m. ET on that day.

Sherwin, a Gregory, Texas-based alumina producer, filed for bankruptcy on Jan. 11, 2016. The Chapter 11 case number is 16-20012.

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