Judge Declines To Carve Out Objections To U. S. Steel Debt Claims In Creditor Protection Case
08/20/2015 - United States Steel Corp.'s Canadian operation, U. S. Steel Canada, has been under creditor protection since September 2014. Its largest creditor? U. S. Steel, which says it is owed more than US$2.2 billion.
It's a claim that other interested parties, the United Steelworkers among them, have contested, arguing that the business is in debt only because of the way U. S. Steel managed it.
And as the business moves through the creditor protection process, U. S. Steel has sought to have those objections dealt with separately. But the judge overseeing the case has now nixed that, reports The Hamilton Spectator newspaper.
According to the newspaper, Justice Herman Wilton-Siegal ruled that the objections are to remain a part of the creditor protection case. And for good reason, he said -- it provides a better chance of finding a solution that will keep the business, the former Stelco, alive, according to The Spectator.
A U. S. Steel Canada spokesperson did not respond to a request for comment, The Spectator said.
Gary Howe, president of Steelworkers Local 1005, told The Spectator that the decision keeps their objections from being lost in a legal purgatory. Andrew Hatnay, an attorney representing current and retired salaried employees, agreed.
"This raises some important issues now rather than later and in a separate proceeding," he told The Spectator.
They argue that some of what U. S. Steel says is debt is actually equity investment, and as such, ranks at the very bottom in terms of who is paid back first.
According to The Spectator, it is widely believed that U. S. Steel will try to acquire U.S. Steel Canada's Lake Erie plant by canceling some of the debt it says it is owed. Taking some of the debt out of the equation could increase the amount of cash U. S. Steel would have to pay. Moreover, a reduction in debt claims would reduce its voting power on a restructuring plan, The Spectator said.
And as the business moves through the creditor protection process, U. S. Steel has sought to have those objections dealt with separately. But the judge overseeing the case has now nixed that, reports The Hamilton Spectator newspaper.
According to the newspaper, Justice Herman Wilton-Siegal ruled that the objections are to remain a part of the creditor protection case. And for good reason, he said -- it provides a better chance of finding a solution that will keep the business, the former Stelco, alive, according to The Spectator.
A U. S. Steel Canada spokesperson did not respond to a request for comment, The Spectator said.
Gary Howe, president of Steelworkers Local 1005, told The Spectator that the decision keeps their objections from being lost in a legal purgatory. Andrew Hatnay, an attorney representing current and retired salaried employees, agreed.
"This raises some important issues now rather than later and in a separate proceeding," he told The Spectator.
They argue that some of what U. S. Steel says is debt is actually equity investment, and as such, ranks at the very bottom in terms of who is paid back first.
According to The Spectator, it is widely believed that U. S. Steel will try to acquire U.S. Steel Canada's Lake Erie plant by canceling some of the debt it says it is owed. Taking some of the debt out of the equation could increase the amount of cash U. S. Steel would have to pay. Moreover, a reduction in debt claims would reduce its voting power on a restructuring plan, The Spectator said.
