Keystone set to emerge from bankruptcy

Keystone set to emerge from bankruptcy

Wire rod producer Keystone Steel and Wire Co. will emerge from Chapter 11 bankruptcy protection on August 31. Keystone filed its restructuring plan in June. The US Bankruptcy Court for the Eastern District of Wisconsin signed off on the company’s restructuring plan on August 10. Details of the restructuring plan were numerous but highlights include: * The assumption of the previously negotiated amendment to the collective bargaining agreement with the Independent Steel Workers Alliance (ISWA), Keystone's largest labor union; * Liabilities due to pre-petition secured creditors would be reinstated in full against reorganized Keystone; * All of Keystone's common and preferred stock outstanding at the petition date would be cancelled; * Pre-petition unsecured creditors of Keystone would receive, in aggregate, $5.2 million in cash, a $4.8 million note and 49% of the common stock of reorganized Keystone (the amount of cash and principal amount of the note may increase based on certain events); * Certain operating assets and existing operations of Sherman Wire Company ("Sherman Wire"), one of Keystone's pre-petition wholly-owned subsidiaries, will be sold at fair market value to Keystone, which will then form a newly created wholly-owned subsidiary of reorganized Keystone with those assets and operations. Key among the bankruptcy settlement changes and improvements “are the reduction of legacy issues that we were able to negotiate with the union and the retirees,” Vick Sternaman, a Keystone spokesperson, told SteelOrbis. An ISWA official declined to comment. Keystone filed for bankruptcy protection from creditors in February 2004, citing rising health-care premiums and gas prices, as well as high raw material costs. Dallas, Texas-based Keystone is a leading manufacturer of and distributor of fencing and wire products, wire rod, industrial wire, nails, and construction products.