Bethlehem Steel files reorganization plan; unsecured creditors receive share of liquidating trust

By Carlise Newman

Chicago, July 30 - Bethlehem Steel filed its disclosure statement and reorganization plan Tuesday with the bankruptcy court; unsecured creditors will receive a share of the liquidating trust assets, in the form of beneficial interests in the liquidating trust.

The estimated percentage recovery is dependent on, among other things, the total amount of unsecured claims that become allowed claims and the value of the consideration shares.

General unsecured claims total $12 million, but Bethlehem estimates that the amount will rise to $5 billion, after deducting duplicate claims, amended and superceded claims, previously paid claims, claims not supported by the debtors' books and records, claims that are covered by insurance, and claims that are subject to other objections. In addition to the company's bonds, this category includes claims of the Pension Benefit Guaranty Corp. Recovery for this class is 0.3%.

Shareholders will receive nothing.

Bethlehem owed certain lenders $290 million under a credit facility secured by liens on its inventory. On the closing of the sale of Bethlehem to International Steel Group, which was in May, Bethlehem repaid all amounts it owed under the inventory credit facility.

As previously reported, the final purchase of Bethlehem price included $790 million in cash and $15 million in stock at closing, and another $120 million to be paid within 75 days to cover short-term liabilities of the Bethlehem estate.

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