US Bankruptcy Judge Ronald Barliant in Wilmington, Delaware, approved the plan with its $615 million asset sale to Nucor Corp. and its $17 million for employee severance and retirement claims.
Last month Bethlehem Steel said it wanted to form a new six-member panel to represent its 75,000 retirees plus 20,000 spouses and dependents in an effort to determine how best to reduce its pension, health care benefits and life insurance obligation to retirees – estimated at close to $2.4 billion.
Roughly 97% of the debtor’s creditors, which hold about 99% of the claims filed against the estate, voted for the reorganization deal, Birmingham Steel lawyers said, according to a Dow Jones news report.
The plan was modified in the last 72 hours to reflect a settlement with the company’s secured lenders, major unsecured creditors and unsecured creditors’ committee, Dow Jones reported
The outlines of the plan, according to Dow Jones:
- As before, proceeds of the $615 million sale to Nucor will go to a group of secured creditors, who will give a portion of the proceeds to unsecured creditors and shareholders.
- The revised and now-confirmed plan provides for distributions valued at more than $77 million to general unsecured creditors and shareholders, though all assets are subject to the secured creditors’ liens.
- Unsecured creditors will receive $17.5 million in cash.
- Shareholders will get an estimated $15 million distribution, made up of cash and the proceeds from the liquidation of some assets.
Birmingham Steel is a nonunion mini-mill that makes steel by melting scrap. The company filed for Chapter 11 bankruptcy protection in early June, listing assets of $487.4 million and liabilities of $681.1 in its petition.
Other Steel Straits
With so many steel companies having faced bankruptcy and other financial problems like Birmingham Steel, the Pension Benefit Guaranty Corp., has been forced to seize a number of steel pension funds so payments could continue.
PBGC officials have cited the steel industry’s rampant pension woes as one reason for the big chunk out of its cash surplus.