U.S. Steel wants creditor protection extended

U.S. Steel will be back in court for the first time in 2015 Wednesdayto ask for continued protection from creditors, marking the latestopportunity for those following the case to get a glimpse at whats happening behind the scenes.

U.S. Steel Canada (USSC) declared bankruptcy last September, triggering a lengthy restructuring process under the Companies Creditors Arrangement Act. The companys current restructuring plans include selling off its operations in both Hamilton and Nanticoke, Ont. by the end of this October.

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To get to that point, U.S. Steel will first ask Superior Court Justice Herman Wilton-Siegel to extend creditor protection until May 15.

The court documents filed with the extension, which are available online, also highlight a number of small steps the company is taking, including targeting spring as the time it will restart its coke ovens and selling some of its land in Hamilton.

Steelworkers Local 1005 President Rolf Gerstenberger, who has called the entire CCAA process a fraud, said the steelworkers are keeping a wary eye on each development.

Gersterberger said while he hears plenty of rumours, its hard to figure out what the company is planning to do because of the closed door nature of the bankruptcy proceedings.

For example, court documents state any company or individual interested in buyingU.S. Steel's land in Hamilton must sign a non-disclosure agreement. Similar agreements also extend to thoseprivy to the ongoing calculation of how much U.S. Steel is liable to pay in employee pension and benefits, Gerstenberger said.

U.S. Steel Spokesman Trevor Harris said the property-related non-disclosure agreements ensure a fair and equitable process.

Harris said there has been some interest in the steel companys land, but could not say from who or how many companies were considering a purchase.

Gerstenberger, meanwhile, said he was surprised the company was considering selling small parcels of land when progress on the larger sale or restructuring/recapitalization process (SARP) appears to have stalled since late November.

"There may be a unique opportunity for USSC to realize the value of its extensive land holdings around Hamilton Harbour in a manner that would not preclude the continued operation and/or sale of its coke ovens, iron and steel-making assets and finishing lines located at Hamilton Works," Chief Restructuring Officer BillAziz states in an affadavit submitted to court.

Judge expected to OK extension

The extension of creditor protection is common in major bankruptcy cases, and is expected to be approved.

Azizsupports the extension in motion materials filed online.I believe that USSC has been acting in good faith and with due diligence, he states.

Harris said U.S. Steel isnt taking anything for granted, but is hopeful the judge will allow it.

Gerstenberger said steelworkers know its a given during the Stelco Inc. bankruptcy case the company was given multiple exemptions.

U.S. Steelis also set to ask the judge to add one additional employee to its list of workers it wants to keep, under the Key Employee Retention Plan.

Coke ovens to fire up in March

The most positive news for steelworkers in the documents is an update to U.S. Steels plan to restart its Hamilton coke ovens, which will re-employ around 77 employees who had been laid off last fall when the company "hot idled"the operations.

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U.S. Steel was given court approval to restart the ovens in December, but the documents show that work wont begin until March, when a steady supply of American coal can be transported through the Welland Canal again.

Harris said some workers will be back on the job ahead of the restart to get everything in order, with the rest returning when the work gets fully underway.

Court documents state the move will bring "significant economic and other benefits to USSC" and will "materially improve USSCs cash flow."

Gerstenberger said while the work is welcome, its mainly the company undoing the damage it inflicted.

"They make it seem like theyre doing you a favour," Gerstenberger said.

The court date is set for the afternoon ofJan. 21 in Toronto.