MILL SALE APPROVED
Wednesday, 22 August 2012 11:27

The sale of the Sparrows Point steel mill to Hilco Industrial and Environmental Liability Transfer was approved in court on Aug. 15.
photo by Roland Dorsey

Benefits to terminate by end of August; last-minute SB bid is rejected

by Nicole Rodman

In U.S. Bankruptcy Court in Wilmington, Del.  last Wednesday, Judge Kevin Carey approved the sale of the Sparrows Point steel mill to liquidator Hilco Industrial and property developer Environmental Liability Transfer.
    Originally set to be approved in court on the morning of Aug. 15, the hearing was postponed until 4:30 p.m. after an unexpected last minute bid by a Dallas-based steel distributor.
    The company, SB International, put in an 11th-hour bid in court last Wednesday, claiming that they offered RG Steel $82 million for the Sparrows Point mill property.
    RG Steel ultimately accepted Hilco and Environmental Liability Transfer’s $72 million bid at auction on Aug. 7.
    In addition to SB International’s last-minute attempt to bid, further hurdles to the sale came up in the form of objections by both the Maryland Department of the Environment (MDE) and the Environmental Protection Agency (EPA).
    Both MDE and EPA objected to the sale, noting that the sale agreement did not mention the 1997 consent decree placing responsibility for environmental cleanup on the owners of the Sparrows Point mill property.
    In court last Wednesday, attorneys for MDE and EPA urged the mill’s new owners to commit to cleaning up the pollution on land as well as offshore.
    Providing all parties with more time to reach agreements, Judge Carey postponed the Wednesday morning hearing to 4:30 p.m. that afternoon.
    By that afternoon, Hilco Industrial and Environmental Liability Transfer had reached an agreement with MDE and EPA.
    As part of the new terms of sale, the new owners agreed to pay $72.5 million, with the extra $500,000 going to fund studies of offshore pollution from the mill.
    The new owners also agreed to assume responsibility for pollutants that flow from the site into surrounding waters after the sale.
    With both parties satisfied, Judge Carey approved the sale. He made no mention of SB International’s last-minute bid during the approval proceedings.
    During last Wednesday’s hearing, a lawyer for Hilco noted that the company is interested in selling the plant to a new operator, providing hope that the steel mill could, one day, return to production.
    Both United Steelworkers Local 9477 president Joe Rosel and local politicians have signaled their intent to seek a new operator for the mill.
    RG Steel’s sale of its Yorkville, Ohio, plant was also approved in court last week. The sale of the company’s Warren facility is expected to be finalized by Thursday.
    As for workers laid-off from the now-shuttered Sparrows Point mill, they face the loss of not only their jobs, but their benefits as well.
    Though Rosel told members last week that the union “is trying to negotiate very short extensions of the benefit programs,” a report in The Baltimore Brew last Sunday indicated that USW chief negotiator David McCall signed an agreement to terminate all worker benefits by the end of August.
    According to the agreement, supplemental unemployment benefit (SUB) insurance and payments to the Steelworkers’ Pension Trust will cease retroactively as of Aug. 10.
    By Aug. 31, all benefit programs, including health, accidental death and dismemberment and prescription drug plans, will be terminated both for active and retired workers.
    According to the terms of RG Steel’s agreement with McCall, approximately 100 workers will stay on in order to assist RG Steel in “asset protection prior to September’s close of sale.”
    The new owners have made no mention of retaining any of the mill’s current workforce once the sale is finalized.