NEWS

U.S. Steel bankruptcy case heads to court as workers rally

10/06/2014 08:56 EDT | Updated 12/06/2014 05:59 EST
Steelworkers staged a rally outside a Toronto court this morning where U.S. Steel officials are set to appear to lay out the case for accepting $185 million from the American parent company to operate its Hamilton and Lake Erie operations until they can be sold off. 

Mayor Bob Bratina is with them and is sitting with the workers in court.  An overflow room set up to accommodate the crowd is now overflowing, pushing some observers into the jury box.

U.S. Steel Canada, which also purchased Stelco’s assets in 2007, declared bankruptcy last month. Now, it wants to take the $185 million from U.S. Steel Corp., its Pennsylvannia-based parent, in debtor-in-possession financing.

Steelworkers’ unions and the province both oppose U.S. Steel’s plan, saying it gives too much power to the American side of the company. The province, which regulates pension plans, is also worried it could be on the hook for millions if the company backs out of pension contributions for its retired workers.

U.S. Steel was given Companies’ Creditors Arrangement Act (CCAA) protection because of its ongoing losses, $3.9 billion in debt and equity, and $837.7 million in pension solvency deficiency, court filings show.

In Hamilton, the court decision could have ramifications to those earning a pension from the company. There are 12,614 people in pension plans, documents show, and 771 active members — the bulk of whom are represented by the union Local 1005.

U.S. Steel Canada has steel operations in Hamilton and Nanticoke, Ont. The court filings say it hopes to have both operations sold by Oct. 31, 2015.

The hearing begins in Toronto at 10 a.m. ET. Watch this page for live coverage from CBC Hamilton's John Rieti.

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