Breaking and associated brands will be offline for scheduled maintenance Saturday May 8 3 AM US EST to 12 PM EST. We apologize for the inconvenience.


Thank you for sharing!

Your article was successfully shared with the contacts you provided.
As USX-U.S. Steel Group and bankrupt Bethlehem Steel Corp. confirmed Tuesday that they were in talks with other steelmakers about a possible merger, the LTV Corp. death watch continued for at least one more day. Workers prayed and lawyers double-checked hotel reservations as Judge William T. Bodoh of the U.S. Bankruptcy Court for the Northern District of Ohio in Youngstown put off deciding if LTV can liquidate or if the company’s creditors and largest union can force the steelmaker to keep operating. “This kind of a situation is unprecedented,” said William Rochelle, a bankruptcy attorney with Fulbright & Jaworski in New York. “Here you have a company that wants to liquidate. And then its creditors and union get in bed together.” He was referring to LTV’s surprise Nov. 20 request for court approval to shut down its mills in Cleveland, Hennepin, Ill., and East Chicago, Ind., and ready them for sale. LTV blamed a failure to renegotiate a contract with its largest union, the United Steel Workers of America, for the move, saying the union’s refusal to grant massive concessions blocks LTV’s chances of obtaining a $250 million, federally guaranteed loan. In a bid to keep LTV alive, USWA and LTV’s unsecured creditors struck back eight days later, reaching a tentative pact offering $350 million in concessions. The creditors are urging Bodoh to delay liquidation because no final decision has been made on the loan guarantee. But LTV, which has been losing $2 million a day since it sought Chapter 11 reorganization protection in December 1999, has said it needs $800 million in cost-savings to survive and holds out little hope for a loan. LTV’s financial woes are not uncommon. It’s one of more than 30 U.S. steelmakers to seek Chapter 11 protection since 1997. But LTV’s legal woes are unique. Because of increasing bitterness between USWA and LTV, it proved difficult for the two sides to agree to a new pact that would surely cost union jobs and benefits. Management threw up its hands and filed to liquidate. (Chairman William Bricker stepped down last week.) That act may have enabled the USWA to find common ground with LTV’s unsecured creditors, who stood to lose everything. With management out of the picture, the unsecured creditors had no choice but to intervene and quickly settled with USWA. Rochelle warned that one or two the nation’s struggling airlines could face LTV’s fate. “The airline industry is similar to steel because both have poor labor relations. So, an airline could use the government as the bad boy who is demanding labor concessions.” And this is probably why USWA announced Tuesday that reality, indeed, bites. The union said it’s prepared to engage in discussions with major U.S. steel makers about possible consolidation of the industry, which seems imminent given U.S. Steel’s and BethSteel’s pronouncements and foreign steelmakers dumping subsidized steel on the market. The union’s policy change is likely to increase the fears of union workers such as Brian Slanker, a 46-year-old crane operator at LTV’s East Side plant in Cleveland. “I’m hoping LTV stays open,” said Slanker, reached by phone Tuesday at the Hub Coffee House in Youngstown across the street from Bodoh’s courtroom. If the company where Slanker has worked for the past 24 years is closed, he’s looking at unemployment and a real possibility of losing his home, he said. “The government should have done more,” Slanker said. “They should have stopped the illegal dumping.” Copyright (c)2001 TDD, LLC. All rights reserved.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.