LTV Hardship Payment to Retirees OKd

LTV Corp.’s plan to make a one-time hardship payment to retired steelworkers whose pensions were cut when the steel firm filed for bankruptcy was approved without objection Friday in a U.S. bankruptcy court.

The plan calls for LTV, the nation’s second-largest steelmaker after USX Corp., to make about $6.7 million in one-time payments ranging from $100 to $750 to about 9,800 retirees.

Their benefits were cut last January after the federal Pension Benefit Guaranty Corp. took over LTV’s four troubled steel industry pension plans.

In a brief court session, U.S. Bankruptcy Judge Burton R. Lifland approved the hardship payment plan, which was supported by the United Steelworkers of America. Lawyers representing the LTV creditors’ committee, a 22-bank credit group and the pension guaranty corporation did not object.

High Labor Costs

LTV, a giant steel, aerospace and energy concern, filed for protection under Chapter 11 of the U.S. Bankruptcy Code last July after struggling for years against falling prices, excess capacity in the steel industry, foreign competition and high labor costs.

Under Chapter 11, LTV is protected from creditor lawsuits while it works out a plan to pay its debts. At the time of the filing, LTV listed liabilities of $4.22 billion and assets of $6 billion.

LTV has said it plans to resolve by May 1 a dispute with the union over the payment of retirees’ health and insurance benefits.

Lifland has scheduled a hearing for May 4 on the union’s request for a restraining order to bar LTV from eliminating or cutting pension benefits required under collective bargaining agreements with Jones & Laughlin Steel and Republic Corp., two steel companies taken over by LTV Steel.

Mammoth Bankruptcy

Union pension and benefit plans have been a major problem in LTV’s mammoth bankruptcy proceedings.

LTV cut benefits for 37,000 retired steelworkers after it filed for reorganization but relented after a six-day strike.