U.S steel bankruptcy

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US Steel’s senior vice-president of finance was in a Toronto courtroom this morning, explaining how the company’s Canadian arm, the former Stelco ended up in bankruptcy proceedings.

US Steel says that US Steel Canada owes $2.2 billion. This was the first day of proceedings that will decide whether that money was a loan from the parent company, to be paid back, or equity that was transferred between branches. If it was a loan, US Steel will become the biggest creditor in the bankruptcy process and among the first to collect, there could be little left for pensioners.

US Steel’s VP of finance told the court the company bought Stelco in good faith, it thought the industry would turn around, but the market instead got worse. Outside court, the head of Hamilton’s Steelworkers union said the key admission he heard was that US Steel decided to take production orders from Canada and move them south of the border.