The Stel Salaried
Pensioners Organization wishes to thank The Hamilton Spectator for permission
to post the following article by Reporter Tara Perkins published in the March
19, 2005 edition
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Mar. 19, 2005. 12:40 AM |
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Removal of two Stelco directors
draws fire |
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By Tara Perkins |
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Directors in boardrooms throughout Canada will be undermined if a judge's decision to toss two men off Stelco's board stands, the Court of Appeal heard yesterday. "The boards of Canadian companies cannot function if they think the court is going to be looking over their should at every decision they make," said lawyer Richard Swan, who is representing Roland Keiper and Michael Woollcombe. Last month, the judge overseeing Stelco's bankruptcy protection ordered Keiper and Woollcombe men off Stelco's board one week after they were appointed. Yesterday, the former directors listened intently in the appeal court as their lawyers tried to have them reinstated. Justice James Farley, who has presided over Stelco's court protection for nearly 14 months, removed the men because they represent the steelmaker's shareholders.That means they might not work in the best long-term interest of Stelco's other stakeholders, such as creditors or employees, the judge said in his ruling. Lawyers for many of Stelco's employee groups argued yesterday in favour of Farley's decision. Andrew Hatnay, lawyer for thousands of Stelco's salaried retirees, said the appointment of Roland and Keiper to the board was "bizarre" and "mysterious." Keiper, his business partner and their families own tens of millions of dollars of Stelco shares. Woollcombe advises Keiper's company, Clearwater Capital, which submitted a bid to refinance Stelco last fall. Although Clearwater dropped the bid, Keiper and Woollcombe wanted seats on Stelco's board while it decides how to refinance. Hatnay said their addition to the board "caught everybody by surprise and it shattered the confidence of (Stelco's) stakeholders," instantly creating a "suspicious atmosphere." Keiper and Woollcombe secured seats on Stelco's board the same day it began evaluating final offers to buy or refinance the company. Stelco later rejected all offers and is currently developing its own money-raising plan. Lawyer Michael McCreary, representing Stelco's Lake Erie and Stelwire unions, said: "Common sense tells you the applicants are going to be more interested in their money than the long-term viability of Stelco." The panel of three appeal court judges did not immediately release a decision yesterday, but said they will reach one quickly. tperkins@thespec.com 905-526-4620 |