US Steel asked the Ontario Superior Court last week to approve its claim of more than $2 billion against the assets of US Steel Canada Inc., which is still operating under Companies’ Creditors Arrangement Act protection. US Steel is reportedly considering repurchasing the Canadian assets.
However, several groups are opposing the move, arguing that their pension claims will be subordinated if US Steel’s full claims are approved. The groups include active and retired salaried employees of the Ontario government and the United Steelworkers union, which represents hourly workers at the Canadian operations.
The claims include pensions owed to them from plans with a solvency deficiency of $839 million and other postemployment benefits of more than $700 million.
In a court filing, the Ontario government said that US Steel “is attempting to rank first among creditors in payment priority on the basis of its purported secured claims.”