Sharon Steel cash likely to go to union not directly to ex workers

Tuesday, 08 Sep 2009

Sharon Steel Corporation has announced that lawyers involved in its bankruptcy have reached a settlement that would give the United Steelworkers USD 52,447 on behalf of the company's former union employees and retirees but not directly to employees and retirees themselves.

The agreement was struck after union lawyers earlier this week asked other attorneys in the case to remember that Sharon Steel workers suffered the most when the company folded.

Mr Phil Beard, a former Sharon Steel creditor's attorney, said that "The way they asked us was so nicely put it made us look within ourselves. It proved to be too hard to turn them down.''

He said that funds would come from recently discovered money from the defunct Farrell steelmaker that had been sitting in various accounts for more than a decade. Initially, USD 479,000 was discovered but that figure has now risen to about USD 590,000.

Bankruptcy court Judge Mr Warren W Bentz has indicated he is likely to approve the agreement. He oversaw both of the steelmaker's bankruptcies.

USW attorneys acknowledged that while former union workers have USD 4.2 million in unpaid claims against the company they probably weren't entitled to the money since there are outstanding legal bills. Under the federal Bankruptcy Code administrative fees and legal bills have a higher priority in getting paid. In this case the fees exceed the amount of the discovered funds.

Mr Gene Bianco, the last president of the main USW local at Sharon Steel, attended a hearing earlier this year and pleaded with Mr Bentz to give union workers something out of the funds. He said that "Not bad. At least we're getting something.''

With Sharon Steel long since gone trying to find former workers and retirees scattered throughout the county would be impossible. Sharon Steel had numerous owners and filed for its first Chapter 11 bankruptcy in April 1987 when it was controlled by the late financier Victor Posner. Shortly after its main Farrell steel plant was sold to New York investment firm Castle Harlan Inc. as part of that bankruptcy reorganization, the mill entered its second bankruptcy in November 1992 and the plant closed later that month.