Judge Confirms U.S. Steel Debt Claims Against Former Canadian Subsidiary
03/01/2016 - An Ontario judge has sided with United States Steel Corporation, agreeing that the steelmaker is indeed owed more than $2.2 billion from its former Canadian subsidiary, U. S. Steel Canada (USSC).
The matter, which arises from USSC's ongoing creditor protection case, was the focus of an eight-day trial in January. U. S. Steel claims it provided the funding to USSC with the intention that it be repaid.
However, the United Steelworkers union, salaried employees and the Ontario provincial government argue that the debt was actually an equity infusion. And therefore, they said, U. S. Steel’s claims should be moved to the end of the line.
But the judge’s ruling confirms U.S. Steel as USSC’s largest creditor and gives it extensive power to shape USSC’s restructuring under creditor protection, reports the Hamilton Spectator newspaper.
In a statement, the United Steelworkers said it is reviewing the decision and discussing its options with its attorneys.
"We can certainly say that we disagree with much of what the judge has decided," said United Steelworkers' Ontario director Marty Warren. "If U. S. Steel was technically insolvent before it tried to convert its equity or unsecured debt into secured debt, then it should not be allowed to do it.
“We are disappointed with this decision, but this issue is not resolved yet – not by a long shot," Warren said.
However, the United Steelworkers union, salaried employees and the Ontario provincial government argue that the debt was actually an equity infusion. And therefore, they said, U. S. Steel’s claims should be moved to the end of the line.
But the judge’s ruling confirms U.S. Steel as USSC’s largest creditor and gives it extensive power to shape USSC’s restructuring under creditor protection, reports the Hamilton Spectator newspaper.
In a statement, the United Steelworkers said it is reviewing the decision and discussing its options with its attorneys.
"We can certainly say that we disagree with much of what the judge has decided," said United Steelworkers' Ontario director Marty Warren. "If U. S. Steel was technically insolvent before it tried to convert its equity or unsecured debt into secured debt, then it should not be allowed to do it.
“We are disappointed with this decision, but this issue is not resolved yet – not by a long shot," Warren said.
