================================================================= WEIRTON BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2003 (ISSN XXXX-XXXX) May 20, 2003 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 609-392-0900 FAX 609-392-0040 ----------------------------------------------------------------- WEIRTON BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 24 Perdicaris Place, Trenton, New Jersey 08618, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtor's cases. New issues are prepared by Emi Rose S.R. Parcon, Frauline Sinson-Abangan, and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re- mailing of WEIRTON BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO WEIRTON BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF WEIRTON STEEL [00002] WEIRTON'S CONSOLIDATED BALANCE SHEET AT DEC. 31, 2002 [00003] COMPANY'S PRESS RELEASE CONCERNING THE CHAPTER 11 FILING [00004] WEIRTON STEEL CHAPTER 11 DATABASE [00005] LIST THE DEBTOR'S 20-LARGEST UNSECURED CREDITORS [00006] DEBTOR'S EMERGENCY MOTION TO USE LENDERS' CASH COLLATERAL [00007] DEBTOR'S MOTION TO APPOINT SEC. 1114 RETIREES' COMMITTEE [00008] S&P CUTS WEIRTON STEEL DEBT RATINGS TO D KEY DATE CALENDAR ----------------- 05/19/03 Voluntary Petition Date 06/03/03 Deadline for filing Schedules of Assets and Liabilities 06/03/03 Deadline for filing Statement of Financial Affairs 06/03/03 Deadline for filing Lists of Leases and Contracts 06/08/03 Deadline to provide Utilities with adequate assurance 07/18/03 Deadline to make decisions about lease dispositions 08/17/03 Deadline to remove actions pursuant to F.R.B.P. 9027 09/16/03 Expiration of Debtor's Exclusive Plan Proposal Period 11/15/03 Expiration of Debtor's Exclusive Solicitation Period 05/19/03 Deadline for Debtor's Commencement of Avoidance Actions Organizational Meeting with UST to form Committees Bar Date for filing Proofs of Claim First Meeting of Creditors pursuant to 11 USC Sec. 341 ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO WEIRTON BANKRUPTCY NEWS ----------------------------------------------------------------- WEIRTON BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtor's case. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of WEIRTON BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. To continue receiving WEIRTON BANKRUPTCY NEWS, please complete the form below and return it by fax or e-mail to: Bankruptcy Creditors' Service, Inc. 24 Perdicaris Place Trenton, NJ 08618 Telephone (609) 392-0900 Fax (609) 392-0040 E-mail: peter@bankrupt.com We have published similar newsletters tracking billion-dollar insolvency proceedings since 1990, starting with Federated Department Stores. Currently, we provide similar coverage about the restructuring proceedings involving NRG Energy, Covanta Energy Corp., Pacific Gas and Electric Company, Enron Corp., National Steel, Bethlehem Steel, LTV, Wheeling-Pittsburgh, Kaiser Aluminum, Metals USA, Fleming Companies, Kmart Corp., Leap Wireless, Adelphia Communications and Adelphia Business Solutions, Genuity, WorldCom, Global Crossing and Asia Global Crossing, Winstar, 360networks, Lernout & Hauspie and Dictaphone, DirecTV Latin America, GenTek, Federal-Mogul, Hayes Lemmerz, Exide Technologies, W.R. Grace & Co., Owens Corning, Armstrong World Industries, USG Corporation, Safety-Kleen, Laidlaw, The IT Group, Encompass Services Corporation, NationsRent, Polaroid Corporation, Ames Department Stores, Service Merchandise, Spiegel, Inc. (and its Eddie Bauer and Newport News subsidiaries), Fruit of the Loom, Burlington Industries, Pillowtex, Warnaco, Acterna, Magellan Health Services, National Century Financial Enterprises, Integrated Health Services, Vencor, Inc., Sun Healthcare Group, Inc., Mariner Post-Acute & Mariner Health, Genesis Health & Multicare, Conseco, Inc., and Conseco Finance Corp., Reliance Group Holdings & Reliance Financial, The FINOVA Group, Inc., Comdisco, Air Canada, United Airlines, US Airways Group, Budget Group, ANC Rental, Bridge Information Services, Loewen Group, Vlasic Foods, and Harnischfeger Industries, Inc. ================================================================= [ ] YES! Please enter my personal subscription to WEIRTON BANKRUPTCY NEWS at US$45 per issue until I tell you to cancel my subscription. Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) WEIRTON BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtor's case. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of WEIRTON BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF WEIRTON STEEL ----------------------------------------------------------------- Weirton Steel Corporation 400 Three Springs Dr. Weirton, West Virginia 26062 Telephone (304) 797-2000 Fax (304) 797-2792 http://www.weirton.com Taking into account the proposed acquisition of National Steel Corporation by U.S. Steel, Weirton is the sixth largest integrated producer of steel products in the United States, and the second largest producer of tin mill products in the United States. Weirton produced approximately 2.7 million tons of raw steel and shipped approximately 2.3 million tons of finished and semi-finished products in calendar year 2002. Weirton offers a broad line of steel products, including tin plate, chrome coated, and black plate comprising tin mill products, as well as a wide range of low carbon flat rolled steel products, including hot and cold rolled sheet steel, as well as hot-dipped and electrolytic galvanized products. Weirton had gross sales in calendar year 2002 of approximately $1.036 billion. Weirton is the second largest domestic producer of Tin Mill Products with a domestic share of approximately 25%. Weirton's share of the domestic sheet market is approximately 3%. In 2002, Tin Mill Products accounted for 46% of the Company's revenue and 35% of tons shipped, while Sheet Products accounted for 54% of the revenue and 65% of the tons shipped by the Company. Weirton is the second largest private employer in the State of West Virginia. Tin Mill Products Tin mill products include tin plate, chrome coated and black plate steels and are consumed principally by the container and packaging industry for food cans, general line cans and closure applications, such as caps and lids. Tin mill products accounted for 46% of revenue and 35% of tons shipped in 2002 compared to 49% of revenue and 36% of tons shipped in 2001 and 39% of revenue and 30% of tons shipped in 2000. Sheet Products Sheet products include hot and cold rolled and both hot-dipped and electrolytic galvanized steel and are used in numerous end- use applications, including among others the construction, appliance and automotive industries. Sheet products accounted for 54% of revenue and 65% of tons shipped in 2002 and 51% of revenue and 64% of tons shipped in 2001 compared to 61% of revenue and 70% of tons shipped in 2000. Weirton provides tolling services at its hot strip mill for a major stainless steel producer, which accounts for almost 20% of the overall capacity at that hot strip mill. The Raw Materials Unlike many of its larger competitors, Weirton does not own, participate in the ownership of or operate production facilities from which it can draw its raw material requirements; thus, Weirton must buy raw materials, including coke and iron ore pellets, in the open market. Weirton has a contract with a subsidiary of Cleveland Cliffs, Inc. to purchase Weirton's standard and flux grade iron ore pellet requirements, which extends through 2009 (or alternatively through 2015 if certain conditions relative to the MABCO vendor investment agreement have not been met). Weirton has a contract with USX Corporation, which extends through December 2004, to purchase blast furnace coke. Additionally, Weirton purchases limestone, tin, zinc and other raw materials on the open market from multiple sources. The primary sources of energy used by Weirton are natural gas and electricity. Weirton has no long-term commitments for the purchase of natural gas and the Company purchases its natural gas requirements on the spot market. Weirton's production operations have the capacity to generate significant electricity as a by- product. Weirton contracts with an outside electric utility to purchase its excess electricity requirements at a reduced rate in consideration of Weirton limiting its internal power generation. Weirton is a party to a supply contract, expiring in 2011, for the supply of its oxygen, hydrogen and nitrogen requirements. From Start to Finish As an integrated steel producer, Weirton produces carbon steel slabs in its primary steel making operations from raw materials to industry and customer specifications. In primary steel making, iron ore pellets, coke, limestone and other raw materials are consumed in blast furnaces to produce molten iron or "hot metal." Weirton then converts the hot metal into liquid steel through basic oxygen furnaces where impurities are removed, recyclable scrap is added and the metallurgy of the product is customized and tested. The basic oxygen process, or "BOP," shop is one of the largest in North America, employing two vessels, each with a steel making capacity of 360 tons per heat. Liquid steel from the BOP shop is then formed into slabs through a multi-strand continuous caster. The slabs are then reheated, reduced and finished into coils at a recently re-built hot strip mill and, in many cases, further cold reduced, plated or coated at a downstream finishing operations. The hot strip mill is one of the best in North America for the production of tin mill product substrate and one of the few in the industry that is capable of rolling both carbon and stainless steel substrate. From primary steel making through finishing operations, Weirton's assets are focused on the production of tin plate, which is typically light gauge, narrow width strip. Weirton believes that its rolling and finishing equipment is near "best in class" in the production of light gauge strip used in the manufacture of tin mill products and other value-added products. Although, as a result of its 48" strip width limitation, Weirton is not a full line supplier of sheet products to certain markets such as automotive and appliance, the narrower strip capacity allows the Company to produce light gauge products more efficiently than larger integrated producers with rolling mills up to 80" in width. Weirton explains that consumers of light gauge, narrow width sheet products recognize its commitment to these products and its reliability of supply, which enhances the stability of its customer base. In addition, the wide range of coatings, including galvanized, galvanneal, electro and galfan, is designed to meet the needs of a demanding and diverse customer base. Weirton's Employees Weirton currently employs approximately 3,523 active employees engaged in the manufacture of steel products, support services, sales and marketing activities, and management and administration. Approximately 2,985 of these employees are in bargaining units covering production and maintenance workers, clerical workers and nurses represented by the Independent Steelworkers Union and approximately 20 individuals are represented by the Independent Guards Union. In excess of 20,000 employees, dependents of current employees and retirees and their dependents rely on Weirton to provide medical and other benefits. Weirton is the second largest private employer in the State of West Virginia. Weirton's Strategic Plan "The characteristics of the tin mill product and sheet product markets, when coupled with the comparative advantages of Weirton's steel making facilities," the Company said in its latest annual report, "are the drivers behind our strategic plan which is to continue to expand our more competitive tin mill business through strategic acquisitions, as well as to further penetrate niche markets in narrow width zinc coated applications that take advantage of our recent galvanizing upgrades and multiple coatings capability." National Steel History Weirton is a Delaware corporation formed in 1982 with offices and production facilities located in Weirton, West Virginia. Weirton and its predecessor companies have been in the business of making and finishing steel products for over 90 years. From 1929 to 1984, the business was operated as the Weirton Steel Division of National Steel Corp. Weirton acquired its principal operating assets from National in January 1984 and became a publicly traded company in June 1989. ----------------------------------------------------------------- [00002] WEIRTON'S CONSOLIDATED BALANCE SHEET AT DEC. 31, 2002 ----------------------------------------------------------------- WEIRTON STEEL CORPORATION CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2002 ASSETS CURRENT ASSETS: Cash and equivalents, including $197,000 of restricted cash.................... $219,000 Receivables, less $6,487,000 allowance... 97,347,000 Inventories, net......................... 165,454,000 Other current assets..................... 4,089,000 -------------- TOTAL CURRENT ASSETS....................... 267,109,000 Property, plant and equipment, net......... 376,758,000 Intangible pension asset................... 40,388,000 Other assets and deferred charges.......... 11,860,000 -------------- TOTAL ASSETS............................... $696,115,000 ============== LIABILITIES CURRENT LIABILITIES: Senior credit facility................... $115,121,000 Notes and bonds payable.................. 8,484,000 Payables................................. 80,689,000 Accrued pension obligation............... 78,200,000 Postretirement benefits other than pensions......................... 32,000,000 Accrued employee costs and benefits...... 42,534,000 Accrued taxes other than income.......... 14,768,000 Other current liabilities................ 2,035,000 -------------- TOTAL CURRENT LIABILITIES........... 373,831,000 Notes and bonds payable.................... 286,522,000 Accrued pension obligation................. 329,842,000 Postretirement benefits other than pensions........................... 324,278,000 Other long term liabilities................ 46,529,000 -------------- TOTAL LIABILITIES................... $1,361,002,000 REDEEMABLE STOCK: Preferred stock, Series A, $0.10 par value; 1,516,405 shares authorized and issued; 1,462,260 subject to put........................ 20,305,000 Less: Preferred treasury stock, Series A, at cost, 54,151 shares......................... (782,000) Preferred stock, Series C, $0.10 par value; 1,934,874 shares authorized and issued.......... 48,372,000 -------------- TOTAL REDEEMABLE STOCK.............. 67,895,000 STOCKHOLDERS' EQUITY (DEFICIT): Preferred stock, Series A, $0.10 par value, 54,145 shares not subject to put........................ 784,000 Common stock, $0.01 par value; 50,000,000 shares authorized; 43,848,529 shares issued.............. 438,000 Additional paid-in capital............... 457,973,000 Common stock issuable, 292,171 shares.... 135,000 Less: Common treasury stock, at cost, 1,971,113 shares...................... (11,431,000) Accumulated deficit...................... (1,034,026,000) Accumulated other comprehensive loss..... (146,655,000) -------------- TOTAL STOCKHOLDERS' DEFICIT......... (732,782,000) -------------- TOTAL LIABILITIES, REDEEMABLE STOCK AND STOCKHOLDERS' DEFICIT......... $696,115,000 ============== ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE CONCERNING THE CHAPTER 11 FILING ----------------------------------------------------------------- WEIRTON, West Virginia -- May 19, 2003 -- Weirton Steel Corp. (OTCC BB: WRTL) today announced it has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The company filed the petition today in the U.S. Bankruptcy Court for the Northern District of West Virginia in Wheeling. Weirton Steel emphasized that normal operations and customer service will continue without disruption, including sales, production, order processing and shipments. The company has secured a $225 million debtor-in-possession (DIP) financing facility to furnish sufficient working capital for its operations. "Weirton Steel is at a crossroads in its history. We must become as competitive as possible and return to profitability so that we can invest in our facilities and pursue strategic growth. Reorganization will stabilize our financial outlook, achieve vital cost savings and help us become a stronger, more competitive company," said John H. Walker, Weirton Steel resident and chief executive officer. The reorganization is necessary for three major reasons: 1. Despite the positive impact of a comprehensive restructuring of the company in 2002 and additional cost-saving efforts this year which improved efficiency, reduced employment costs and addressed expenses and maturities at long-term debt, Weirton Steel still faces financial challenges. These challenges include declining market conditions and overwhelming post- retirement obligations, which include pension funding, retiree healthcare benefits and life insurance, known as legacy costs. Reorganization through the court will enable Weirton Steel to address legacy costs as well as burdensome contracts which cannot be accomplished on an out-of-court basis. 2. Reorganization also will enable Weirton Steel to improve its liquidity while continuing normal operations as an independent company. Now financing facilities available only in the context of a bankruptcy filing will provide additional needed liquidity to support operations. 3. Weirton Steel's goal is to use the reorganization process to become as competitive as possible in the rapidly consolidating steel industry. The new industry model' - fewer and larger steel companies that have consolidated production and significantly reduced costs- has changed the domestic industry. Consolidated companies have gained significant competitive advantages by substantially reducing their operating expenses, primarily by buying assets in bankruptcy sales resulting in minimal or no legacy costs. By contrast, since it has been maintaining a traditional pension plan, the company's pension liabilities have dramatically grown in the past several years largely due to the prolonged stock market downturn which has eroded pension assets, reduced returns and increased the calculation of obligations. Outside of reorganization, the company can spread out some of its legacy obligation payments, but not reduce them to competitive levels. American Steel Industry In "State of Siege and Transformation" "The American Steel industry is in a state of siege and transformation. The challenges facing Weirton Steel are the same as those affecting our entire industry. In the past five years, 36 domestic steel companies have filed for bankruptcy protection. As this trend continues, large well-capitalized companies are creating a 'new industry model' by acquiring assets, consolidating production, slashing costs and cutting jobs," Walker said. Working Capital for Continuing Operations Weirton Steel will maintain control and possession of its assets while undergoing Chapter 11 reorganization, instead of having a court-appointed trustee operate the company. The new [$225 million] DIP financing secured by the company was provided by Fleet Capital Corp., Chicago, as agent, the rest of Weirton Steel's current bank lending group, and a new term lender, Manchester Securities, New York City. "This financing is an expression of confidence in our company. Weirton Steel is now focused on utilizing the reorganization process to achieve additional costs savings that could not be attained through out-of-court restructuring efforts," Walker said. "In the past year, we did everything we could do outside the bankruptcy venue before taking this necessary step. Our previous initiatives strengthened the company, but it became increasingly evident in the current industry climate that Chapter 11 reorganization is the only remaining solution to address our liability issues. With the support of our employees, customers, vendors and other stakeholders, our goal is to preserve the value of our business and emerge from this voluntary process as a stronger and more competitive producer. Walker emphasized the reorganization will not disrupt the company's operations or alter its historic commitment to its employees, customers and the region. Preserving Jobs and Our Future "Weirton Steel remains a viable business that is deeply committed to our employees, the city of Weirton and the state of West Virginia. We are taking this step to preserve our company and jobs that benefit residents of West Virginia, Ohio and Pennsylvania. In reorganization, we will be working to develop a plan to keep our core operations and facilities intact," Walker commented. "We expect the court to approve our request to continue to pay all salaries and wages." Weirton Steel also is seeking court approval to form a retiree committee to assist the company in addressing the legacy cost issue. Prior to the court filing, the company took aggressive action in the past two years to reduce costs, which management believes better positions the company to develop a reorganization plan. Weirton Steel's 2001-2002 out-of-court restructuring included: a $50 million cost-reduction through job eliminations; a $40 million improvement in liquidity through vendor investment programs; an additional $35 million liquidity boost by securing a new senior credit facility; and a $115 million reduction in its public debt through two exchange offers. This year, the company lowered its employment costs by $38 million on an annual basis by negotiating labor agreements with the Independent Steelworkers Union and the Independent Guard Union. The contracts included elimination of a planned wage increase, a 5 percent wage reduction and a freeze on pensions. Non-represented employees incurred similar concessions. Shares of the company's common stock (WRTL) continue to trade on the OTC Bulletin Board. The company has not set a target date for emergence from Chapter 11, but Walker stressed the company's strategy is to move quickly. "Our goal is to emerge from this process, as soon as we can, as a stronger, more competitive company," Walker said. 'There is much work ahead. Time and time again, our employees have proven their ability to overcome challenges and handle change. By working together, we can succeed and preserve Weirton Steel and its future." Weirton Steel is the sixth largest integrated U.S. steel company and produces hot rolled, cold rolled, galvanized and tin mill products (TMP). It is the nation's second largest TMP producer. Founded in 1909 by Ernest T. Weir and operated in its current form as an independent business since 1984 and as a public company since 1989, the company employs 3,500 workers at its facilities in Weirton, W.Va. For more information on the company, visit its Web site at http://www.weirton.com or call its toll-free reorganization hotline at 1-866-253-4668. ----------------------------------------------------------------- [00004] WEIRTON STEEL CHAPTER 11 DATABASE ----------------------------------------------------------------- Debtor: Weirton Steel Corporation 400 Three Springs Drive Weirton, WV 26062 Chapter 11 Petition Date: May 19, 2003 Bankruptcy Court: United States Bankruptcy Court Northern District of West Virginia P.O. Box 70 Wheeling, West Virginia 26003 Telephone (304) 233-1655 Bankruptcy Judge: The Honorable L. Edward Friend, II Debtor's Lead Bankruptcy Counsel: Robert G. Sable, Esq. Mark E. Freedlander, Esq. David I. Swan, Esq. James H. Joseph, Esq. McGuireWoods LLP 625 Liberty Avenue Dominion Tower, 23rd Floor Pittsburgh, PA 15222 Telephone (412) 667-6000 Fax (412) 667-6050 Debtor's Local Bankruptcy Counsel: Arch W. Riley, Jr, Esq. Bailey, Riley, Buch and Harmon Riley Building, Suite 900 53 14th Street P.O. Box 631 Wheeling, West Virginia 26003-0081 Telephone (304) 232-6675 Fax (304) 232-9897 Debtor's Financial Advisors: Michael C. Buenzow FTI Consulting, Inc. Park One Center 6100 Oaktree Boulevard, Suite 200 Independence, OH 44131 Telephone (216) 986-2750 Fax (216) 986-2749 - and - FTI Consulting, Inc. 333 West Wacker Drive, Suite 600 Chicago, IL 60606 Telephone (312) 252-9333 Debtor's Investment Banker: Jonathan B. Cleveland P. Eric Siegert Houlihan Lokey Haward & Zukin Capital 225 South Sixth Street, Suite 4950 Minneapolis, MN 55402 Telephone (612) 338-2910 Fax (612) 338-2938 Debtor's Special Corporate, Labor, ERISA, Pension, Environmental and Trial Counsel: Michael C. McLean, Esq. Kirkpatrick & Lockhart LLP Henry W. Oliver Building 535 Smithfield Street Pittsburgh, PA 15222 - and - James A. Walls, Esq. Spilman, Thomas & Battle, PLLC 333 Penco Road, Suite A Weirton, WV 26062 - and - Spilman, Thomas & Battle, PLLC 990 Elmer Prince Drive, Suite 205 Morgantown, WV 26505 Debtor's Procurement Consultants: John D. Fry President Procurement Specialty Group, Inc. 125 Technology Drive, Suite 102 Canonsburg, Pennsylvania 15317 Telephone (724) 745-9600 Fax (724) 745-2442 Debtor's Human Resource Consultants: Peter J. McCormick Mary Mitchell Tom Hircik Angle Busch Buck Consultants, Inc. 500 Grant Street, Suite 2900 Pittsburgh, PA 15219 Telephone (412) 281-2506 Fax (412) 281-0677 Debtor's Public Relations Consultant: Jerry Thompson Partner & Director Ketchum, Inc. Six PPG Place Pittsburgh, PA 15222 Raymond Kotcher Senior Partner & President Ketchum, Inc. 292 Madison Avenue New York, NY 10017 Debtor's Claims Agent: Louis A. Recano Chairman Donlin Recano & Company, Inc. 419 Park Avenue South, Suite 1206 New York, NY 10016 U.S. Trustee: Debra A. Wertman Assistant United States Trustee Office of United States Trustee 300 Virginia Street East Room 2025 (2nd Floor) Charleston, WV 25301 Telephone (304) 347-3400 Fax (304) 347-3402 ----------------------------------------------------------------- [00005] LIST THE DEBTOR'S 20-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Entity Nature Of Claim Claim Amount ------ --------------- ------------ Deutsche Bank Trust Co. Indenture trustee to $16,336,000 280 Park Avenue 10 3/4% Series 2005 Mail Stop NYC 030914 Notes New York, NY 10018 Attn: Irene Golavashchuk ph-212-454-4219 fax-212-454-0302 Deutsche Bank Trust Co. Indenture Trustee to $12,658,000 280 Park Avenue 11 3/8% Series 2004 Mail Stop NYC 030914 Notes New York, NY 10018 Attn: Irene Golovashchuk ph-212-454-4219; fax-212-454-0302 USX Corporation Trade debt $11,072,625 600 Grant Street Pittsburgh, PA 15219-4776 Attn: David W. Hutchison Carol Anestis ph-412-443-4705 fax-412-433-3624 J.P. Morgan Trust Company Indenture trustee to $10,720,000 One Oxford Center Pollution Control Bonds 301 Grant Street Series 1989 8 5/8% Suite 1100 Due 11-1-14 Pittsburgh, PA 15219 de minimis ph-216-694-5939; collateral value fax-216-694-5385 Henkel Chemical Mgmt. Trade debt $4,868,572 P.O. Box 101795 Atlanta, GA 30392-1795 Attn: Trudy Hill ph-1-800-831-3130 fax-304-797-4351 ALLEGHENY POWER TRADE DEBT $2,857,189 800 CABIN HILL DRIVE GREENSBURG, PA 15601-1689 Attn: JOHN RUTKOWSKI FAX-412-837-3000 KOPPERS MONESSEN TRADE DEBT $2,508,066 PARTNERS L.P. 436 SEVENTH AVENUE PITTSBURGH, PA 15219-1800 Attn: DOUG PFEIFFER PH-412-227-2001 FAX-412-227-2202 COMPREHENSIVE LOGISTICS TRADE DEBT $1,800,000 127 PUBLIC SQUARE (ESTIMATED) 15TH FLOOR CLEVELAND, OH 44114 Attn: HEATHER PH-330-793-1345 FAX-330-793-3404 ALLIANCE ENERGY TRADE DEBT $1,587,095 9300 SHELBYVILLE ROAD SUITE 810 LOUISVILLE, KY 40222-5145 Attn: BRYAN ROBINSON PH-502-214-6353; FAX-502-426-8800 VESUVIUS USA TRADE DEBT $1,339,828 5645 COLLECTIONS CENTER DRIVE CHICAGO, IL 60693 FAX-412-276-7313 MILLCRAFT PRODUCTS, INC. TRADE DEBT $1,333,263 MANIFOLD ROAD P.O. BOX 587 WASHINGTON, PA 15301 Attn: JACK B. PIATT, II PH-724-222-5000 FAX-724-222-6541 MPW INDUSTRIAL TRADE DEBT $1,118,648 SERVICES, INC. 9711 LANCASTER ROAD SE HEBRON, OH 43025 Attn: PATTY MASON PH-1-800-827-8790 FAX-614-929-3309 MCCARIS TRADE DEBT $1,089,633 P.O. BOX 360375 PITTSBURGH, PA 15251 Attn: CREDIT DEPARTMENT PH-412-843-5660 FAX-724-843-3100 SOLID WASTE TRADE DEBT $1,074,692 SERVICES, INC. 320 GODSHALL DRIVE HARLEYSVILLE, PA 19430 Attn: ANGIE PH-215-256-1900 FAX-215-256-4504 MOTION INDUSTRIES, INC. TRADE DEBT $1,050,470 P.O. BOX 358 WIERTON, WV 26062 Attn: GERRI GIVENS PH-304-797-7094 FAX-304-797-8256 INTERNATIONAL MILL TRADE DEBT $979,569 SERV, INC. 1155 BUSINESS CENTER DRIVE SUITE 200 HORSHAM, PA 19044 Attn: BILL MILLER PH-215-956-5508 FAX-215-956-5598 SHEFFIELD FORGEMASTERS TRADE DEBT $861,274 ROLLS, LTD. 4 SWALLOW HILL ROAD CARNEGIE, PA 15106 Attn: PAT MCCAFFREY PH-412-276-0916 FAX-412-276-7069 BOC GASES TRADE DEBT $844,788 9800 MCKNIGHT ROAD, SUITE 300A PITTSBURGH, PA 15237-6006 Attn: DAVE READ PH-412-366-8733 FAX-412-366-8700 MINTEQ INTERNATIONAL, INC. TRADE DEBT $675,709 P.O. BOX 204 BORDENTOWN AVENUE OLD BRIDGE, NJ 08857 Attn: MARY FIORENTINO PH-1-800-390-9393 FAX-219-922-3482 XTEK, INC. TRADE DEBT $661,323 C/O MECHANICAL MAINTENANCE GRANT AVENUE & B&O RAILROAD P.O. BOX 95052 PITTSBURGH, PA 15223 Attn: BILL OMERA PH-412-782-2014 FAX-513-733-7939 ----------------------------------------------------------------- [00006] DEBTOR'S EMERGENCY MOTION TO USE LENDERS' CASH COLLATERAL ----------------------------------------------------------------- "Most important to Weirton's successful rehabilitation and reorganization . . . is the Company's access to cash liquidity," James T. Gibbons, Senior Director -- Corporate Development and Strategy for Weirton Steel Corporation, tells Judge Friend. Weirton has significant cash requirements, Mr. Gibbons explains, to purchase materials, make payroll and honor other obligations. "A lack of access to working capital," Mr. Gibbons says, "would immediately and irreparably harm Weirton, its bankruptcy estate and creditors." Weirton is the borrower under a Loan and Security Agreement dated October 26, 2001, as amended and restated as of May 3, 2002, and again on June 18, 2002, and subsequently amended from time-to- time. That facility -- according to data obtained from http://www.LoanDataSource.com -- provided Weirton with up to $180 million (after accounting for a $20 million required reserve) of working capital financing from: Commitment Lender ---------- ------ $50,000,000 Fleet Capital Corporation $50,000,000 Foothill Capital Corporation $50,000,000 The CIT Group/Business Credit, Inc., $35,000,000 GMAC Business Credit, LLC, and $15,000,000 Transamerica Business Capital Corporation. The chapter 11 filing, of course, throws that facility into default. The Debtor admits its owes the Prepetition Lenders $160,551,115.93 as of the Petition Date. Weirton's obligations to repay amounts borrowed from these lenders are secured by a first-priority mortgage, lien and security interest in the majority of the Company's assets, including all accounts receivable, inventory, products and proceeds thereof, and Wierton's Tin Assets. The Debtor needs continued access to cash coming in the door, by this emergency motion, sought and obtained Judge Friend's approval of a consensual cash collateral arrangement that will allow Weirton to access those funds. The Debtor has immediate authority to use up to $10 million of the Lenders' Cash Collateral pending approval of a debtor-in- possession financing facility. This should be a one-day loan to bridge the Debtor's needs for cash from the time of the bankruptcy filing Monday morning through a 3:00 p.m. Interim DIP Financing Hearing today. The DIP Facility contemplates a complete roll-up of the Prepetition Financing Facility, transforming those prepetition loans into superpriority senior secured postpetition borrowings. ----------------------------------------------------------------- [00007] DEBTOR'S MOTION TO APPOINT SEC. 1114 RETIREES' COMMITTEE ----------------------------------------------------------------- Wasting no time getting the ball rolling to negotiate modifications to retiree benefits, Weirton Steel Corporation asks Judge Friend to appoint a Committee of Retired Employees pursuant to 11 U.S.C. Sec. 1114. Prior to filing for chapter 11 protection, Weirton obtained the consent from 64% of their Retirees to share their healthcare benefit costs. While Weirton received significant support, it wasn't sufficient to bind all Retirees to that new deal. Wilbur Ross' International Steel Group, Inc.'s recent acquisitions of substantially all of the assets of LTV Steel, Acme Steel and Bethlehem Steel have name that new entity the low- cost producer in the steel industry because ISG isn't plagued by legacy healthcare costs. National Steel and Wheeling- Pittsburgh's operations won't be burdened by legacy costs either. The only way Weirton sees that it can be competitive is to cut its legacy healthcare costs. Section 1114 of the bankruptcy code calls for appointment of a formal Retirees' Committee to negotiate with a chapter 11 debtor in good faith before unilateral retiree benefits are made. Weirton wants to start those good faith negotiations now. Weirton relates that it paid some $30.7 million in Retiree Benefits to more than 20,000 Retired Employees or their surviving spouses in 2002. Unless trimmed, the cost will likely increase to $31.2 million in 2003. An actuarial exercise in 2002 pegged the present value of Weirton's future Retiree Benefit costs at a whopping $356 million . . . right up there with Weirton's $407 pension funding liability. Mark E. Friedlander, Esq., at McGuireWoods LLP, explains that the Sec. 1114 Committee will act as the authorized representative for all retirees not represented by a labor organization. The Debtor suggests that the Court appoint a five-member Committee including: 1 participant in the Under 65 Point-of-Service Plan; 1 participant in the Under 65 Medical Indemnity Plan; 1 participant in the Over 65 Medicare Supplement plan; 1 participant in the Over 65 Medicare Choice Plan; and 1 additional member (perhaps a Union representative). The Debtor points the Court to In re Ames Department Stores, Inc., 1992 WL 272492 (S.D.N.Y. 1995); In re GF Corp., 996 F.2d 1215 (6th Cir. 1993); and Matter of Federated Department Stores, Inc., 121 B.R. 332 (Bankr. S.D. Ohio 1990) for guidance about how other bankruptcy courts have handled Sec. 1114 Committees. ----------------------------------------------------------------- [00008] S&P CUTS WEIRTON STEEL DEBT RATINGS TO D ----------------------------------------------------------------- NEW YORK, New York -- May 19, 2003 -- Standard & Poor's Rating Services said today that is has lowered its corporate credit rating on Weirton Steel to 'D' from 'CCC' following the company's voluntary filing for reorganization under Chapter 11 of the U.S. bankruptcy code. "Despite cost-cutting efforts that included securing wage and benefit concessions from its unions, the company's financial performance has been adversely affected by weak demand, low selling prices, high energy and raw material costs," said Standard & Poor's credit analyst Dominick D'Ascoli. "Weirton also has heavy legacy liabilities, that it could seek relief from during the bankruptcy process in order to further improve its cost position." West Virginia-based Weirton Steel is the nation's sixth- largest integrated steel producer. The company produces flat- rolled steel and tin mill products. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at http://www.ratingsdirect.com All ratings affected by this rating action can be found on Standard & Poor's public Web site at http://www.standardandpoors.com under Fixed Income in the left navigation bar, select Credit Ratings Actions. *** End of Issue No. 1 *** ------------------------------------------------------------------------- Peter A. Chapman peter@bankrupt.com http://bankrupt.com ------------------------------------------------------------------------- Recommended Reading: Professor Stuart Gilson's newest title, "Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups." List Price: $79.95 -- Discounted to $55.96 at http://amazon.com/exec/obidos/ASIN/0471405590/internetbankrupt -------------------------------------------------------------------------