Now we know what the United Steel Paper and Forestry, Rubber, Manufacturing Energy and Allied Industrial Service Workers International’s Hail Mary to keep Hamilton Specialty Bar from liquidating is and it is more hope than reality.
The union asked for additional time (until Mar. 26) so that KAL Advisory Partners can to plans to present a going-concern bid to the court. According to KA, it needs the time to finalize the terms of its arrangement with the USW and other stakeholders. And KAL will have to determine the level of customer commitment that will exist when the plant reopens.
It’s a huge leap of faith since the court already agreed to sell the plant to AIM with a C$250,000 break fee and asked the bankruptcy court hearing the Stelco to postpone a decision until Mar. 26, 2018 in selling the facility to AIM and Triple M for scrap and liquidation of its inventory.
The union told the court: “To date, KAL has interviewed a significant number of HSB’s customers, and based on the positive feedback it received, has concluded that HSB continues to have considerable goodwill in the marketplace. In order to confirm the commitment of HSB’s customers, KAL proposes to run a “Dutch-auction process”. Okay, you got me there. Will KAL auction the plant? There has to be a minimum price covering the break fee and the cost of operating the facility through bankruptcy too. And, I am sure that KAL wants some money too.
The union added: “The legitimate need for this considerable due diligence is a direct result of HSB’s abrupt receivership and cessation of operations, which caused its largest customers to need to find other suppliers to replace HSB’s products; KAL needs to undo the damage of the precipitous receivership and shutdown.
The adjournment will allow KAL to solicit customers and determine how much product these customers are willing to commit to purchase and at what price. With the benefit of these commitments, KAL intends to restart production by Apr. 15, 2018, rebuilding HSB’s book of business over time.
So how many people believe HSB’s old customers will abandon their new suppliers and possibly pay more for their steel? Please raise your hand.