Judge sides with U.S. Steel

[projekktor id=’23285′]

A court ruling in favour of U.S. Steel could translate to less money for roughly 20 000 Stelco pensioners. Basically the ruling means U.S. Steel could control the disbursement of the rest of the U.S. Steel Canada assets, and that means there’s a greater chance the under funded pension fund will not get topped up.

A judge agreed that the more than $2.2 billion dollars the American company invested in its Canadian operations, including Hamilton and Nanticoke, are debts to be repaid. Essentially, the Pittsburgh-based corporation loaned the money to U.S. Steel Canada, which is now in the middle of bankruptcy protection proceedings.

There was a lot of objection to U.S. Steel’s claims from unionized workers, salaried active and retired employees, as well as the province.

The union argued that U.S. Steel should not be allowed to go to the front of the line over other creditors, particularly thousands of pensioners and workers and they believe the move is just an attempt to recover the cost of buying Stelco in 2007.  But according to Local 1005 president, Gary Howe, this legal battle is far from over. Howe says there’s still grounds for two levels of appeal, and that could take years to resolve.

Meanwhile, Bloomberg News says there are three bids on U.S. Steel’s bankrupt operations in Ontario. They include Bedrock Industries, a New York-based private equity company that wants to combine the former Stelco operations with Essar Steel Algoma, which is also in bankruptcy protection. Other bidders include India’s Essar Capital, and an American coal mining company called ERP Compliant, which has offered $1.5 billion for U.S. Steel Canada’s sites.