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LTV Corp. Wants to Sell Aerospace Unit

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From Associated Press

LTV Corp. said Monday that it would try to sell its $2-billion aerospace and defense division to speed up its bankruptcy reorganization, but creditors opposed the plan.

“We believe a sale of the aerospace and defense business will provide the fastest exit from Chapter 11 and ensure a very strong base going forward,” said David Hoag, LTV’s president and chief executive officer.

Proceeds from the sale would be used to help restore pension plans of LTV’s steel subsidiary, a key element of the bankruptcy case.

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Robert Miller, counsel to an unofficial committee of the company’s aerospace and defense creditors, called the idea “a cynical and ill-conceived attempt to confiscate the value which rightfully belongs to the aerospace creditors.”

“It may well be in the steel company’s interest to sell off aerospace,” Miller said, “but we fail to see how it’s in the interest of aerospace’s creditors to do that.”

He described the division as the “best money-making asset the company has.”

The division accounted for one-third of LTV’s $6 billion in revenue last year. It manufactures missiles, parts for the B-2 Stealth bomber and other planes and the Hummer vehicle that was a standout in the Gulf War.

Some creditors urged the company to sell the divisions when LTV filed for bankruptcy in 1986. Company executives kept the company whole and fought a claim that it was liable for about $3 billion to three under-funded pension plans of its steel subsidiary.

After losing the liability fight in the Supreme Court, LTV and the Pension Benefit Guaranty Corp. tentatively settled on a 30-year schedule for the company to replenish the funds.

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