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WCI Lenders File Reorganization Plan
WARREN, Ohio -- Attorneys representing WCI Steel Inc.'s secured bondholders have submitted a plan to reorganize the company and bring it out of bankruptcy, according to documents filed with the U.S. Bankruptcy Court of the Northern District of Ohio.The investors filed their plan May 12 in Akron. Last month, WCI and its parent company, Renco Group Inc., submitted a restructuring plan of their own, shortly after the parties reached a tentative labor agreement with United Steelworkers of America Local 1375.Under the bondholder's plan, the investors will assume existing obligations for retiree health benefits but not the old pension plan, documents show. That pension plan, they say, is guaranteed by Renco or could be assumed by the Pension Benefit Guarantee Corp., a federal agency that backs underfunded employee pensions. Shareholders would also receive $100 million in 10-year senior secured under the plan. Although there is no tentative collective bargaining agreement between the bondholders and the Steelworkers, the plan calls for a new company under the investors' control to hire USWA workers.Mike Rubicz, president of Local 1375, said the WCI/Renco plan offers the best protection for the steel company's retirees. "We have a tentative contract with WCI, not the bondholders. We support the WCI plan," he said. Retiree pensions, he noted, are guaranteed by the Renco Group under the company's plan, whereas there are no guarantees from the bondholders in their plan. "This is a very important issue," he added.On May 12, WCI and the Steelworkers agreed to an order that terminated the company's right to exclusively file a reorganization plan and instead allow competing plans to be presented to the court. The bondholders then submitted their plan.On Sept. 16, 2003, WCI filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code. WCI is an integrated steelmaker producing more than 185 grades of custom and commodity flat-rolled steel from its Warren facility. "