The Stel Salaried
Pensioners Organization wishes to thank The Hamilton Spectator for permission
to post the following article by Reporter Naomi Powell published in the January
12, 2006 edition
By Naomi Powell
The Hamilton Spectator
(Jan 12, 2006)
Stelco's shareholders have backed out of an attempt to
cross-examine a controversial former director.
The move comes only days before shareholders will battle
Stelco in an attempt to rescue their investments in the company.
"We decided it wasn't necessary to deal with that
contentious issue," Peter Jervis, a lawyer for the shareholders. "We
have enough issues to deal with."
The shareholders will appear in court on Jan. 17 in hopes of
dissuading Justice James Farley from approving Stelco's plan to emerge from
nearly two years of bankruptcy protection. As part of their case, they had
hoped to question former Stelco director Michael Woollcombe, who resigned from
Stelco's board along with fellow director Roland Keiper in August.
Keiper and Woollcombe, who were appointed to the board last
year at the behest of shareholders, resigned citing disagreements with the
company over financial forecasts.
Although Stelco's board was cleared of any wrongdoing after
an investigation by Coulter Osborne, the province's integrity commissioner and
a former associate chief justice of Ontario, specific details on why Keiper and
Woollcombe left the board were sealed by the court.
The shareholders abandoned their motion to cross-examine
Woollcombe because the company's current plan is based on a revised set of
financial projections, not the ones he disputed, Jervis said yesterday.
"There wasn't much point in cross-examining Mr.
Woollcombe about older forecasts," he said. "It wouldn't be
relevant."
The shareholders group, which includes Toronto investment
firm Pollitt & Co. and AGF Management Ltd, claim the company is lowballing
its financial forecasts in an attempt to justify wiping out all existing
shares. Stelco's restructuring plan, approved in December, calls for the
company to issue new shares, a majority of which will be awarded to financial
backers Tricap Management Ltd. and hedge funds Sunrise Partnership and Appaloosa
Management.
Jervis' clients will still argue on Jan. 17 that Stelco's
forecasts are based on overly pessimistic forecasts for steel pricing in 2006.
The group commissioned business valuators Navigant Consulting to provide a
separate forecast report using estimates from Metal Bulletin Research that puts
the 2006 price of hot-rolled steel at $525 per tonne. Stelco's August forecast
was $458 per tonne.
npowell@thespec.com
905-526-4620