NEW YORK A bankruptcy court judge has rejected the Steelworkers Pension Trusts motion to stop the sale of Ormet Corp.s aluminum smelter in Hannibal, Ohio.
The July 23 ruling by Judge Mary F. Walrath in U.S. Bankruptcy Court in Delaware effectively allows Niagara Worldwide LLC to complete its $25.25-million purchase of the facility.
Niagara, Wis.-based Niagara Worldwide acquires, manages, markets and sells for final disposition idle industrial property and assets both domestically and internationally.
Hannibal-based Ormet had sought a buyer that would resume output at the Hannibal plant (amm.com, Feb. 18). The bankrupt company shut the smelter in October after failing to secure a more favorable power rate from Ohio regulators (amm.com, Oct. 4).
The Steelworkers Pension Trust intends to appeal to extend a U.S. Appeals Court opinion to protect Niagara Worldwide from the trusts successor withdrawal liability claim worth $5.5 million, according to a spokesman for the Trevose, Pa.-based trust.
These types of saleswhere a bankruptcy trustee or debtor-in-possession may sell the bankrupt estates assets free and clear of any interest in such propertyhave become a "major problem" for Employee Retirement Income Security Act pension plans across the country, Neil Gregorio, a lawyer representing the trust, told AMM.
"Corporations are improperly using (bankruptcy) sales as a sword to strip pension plans of millions of dollars of contributions that are needed in order to support millions of families during retirement," he said. "This is clearly not what Congress intended."