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Judge Urges Compromise on WCI Plans
WARREN, Ohio -- WCI Steel Inc. will have to wait a little longer before a decision is made regarding the company's plans to reorganize and emerge from bankruptcy protection.U.S. Bankruptcy Judge Marilyn Shea-Stonum filed an opinion late Wednesday concerning two proposed reorganization plans that were previously presented to the court. The opinion urges the parties use the next several weeks to forge a single compromise plan for the court to consider. According to the opinion, neither plan meets all of the legal requirements for the court's approval. The opinion is not a formal ruling on the plans, however, and the judge said she will not enter such a ruling for the next several weeks. The WCI reorganization plan, sponsored by its ultimate parent company, the Renco Group Inc., would have enabled WCI to emerge from bankruptcy under its current ownership with a new labor contract in place. A competing plan was introduced by the company's noteholders, which would allow reorganization to proceed on their terms.Edward R. Caine, WCI vice chairman and chief restructuring officer, said that WCI remains committed to presenting a reorganization plan that maximizes the long-term value of the WCI estate. He added that the court's opinion did indicate that a framework for a confirmable plan exists and suggested that the parties explore possible amendments to the WCI plan as a means to that end."We are obviously disappointed that completion of the process will be delayed, but WCI is resolute in our desire to bring forth a reorganization plan that will be confirmed," Caine said. "WCI is a solid company that will ultimately emerge from bankruptcy as a viable player in the steel market."Caine stressed the court's opinion will not affect company operations, noting that WCI has reported strong profits in recent months and that the company's financial outlook remains positive."We have the financial capability to meet our commitments to our bankers, vendors and employees," Caine said. "We've greatly appreciated their support during these proceedings and we ask for their continued patience as we work through the reorganization process."WCI filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code on Sept. 16, 2003.The company sustained losses of $100 million in 2002 and $66 million in 2003. For fiscal year 2004, the company reported profits of $57 million on sales of $627.4 million -- an increase of $137 million from FY 2003.WCI is an integrated steelmaker producing more than 185 grades of custom and commodity flat-rolled steel at its Warren, Ohio facility. WCI products are used by steel service centers, convertors and the automotive and construction markets. The company has approximately 1,650 employees."