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
12, 2005 edition
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Mar. 12, 2005. 12:58 AM |
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Union backs decision to oust
Stelco directors |
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Steelworkers ask court not to accept appeal to
reinstate them |
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By Tara Perkins |
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Justice James Farley did not overstep his bounds by kicking two directors off Stelco's board, the United Steelworkers argued in court documents yesterday. Michael Woollcombe and Roland Keiper are asking the Court of Appeal to overturn Farley's decision and put them back on Stelco's board. The court will decide whether or not to accept the case on March 18. Stelco's salaried retirees, the Pittsburgh-based head office of the Steelworkers, and Stelco's Lake Erie and Stelwire locals are arguing against the case. In yesterday's documents, the union says Keiper and Woollcombe muscled their way onto Stelco's board during a critical phase in the steelmaker's 13-month restructuring. Stelco added the two men to its board on Feb. 18. That same day, it began evaluating offers to buy or refinance the company. Keiper is the president of Clearwater Capital, a Toronto-based investment firm. He owns a large percentage of Stelco's shares and has been highly critical of the company's sale process. At one point, Clearwater submitted its own financial offer to Stelco, which it later withdrew. Woollcombe is an external adviser to Clearwater. One week after they were appointed, Farley ordered the two directors off the board, saying they represent shareholders and might not work in the best interests of all of Stelco's stakeholders, including workers and creditors, over the long-term. The judge noted that Keiper and Woollcombe had the backing of more than one-third of Stelco's shareholders, potentially giving them the power to have the company's entire board replaced by calling a shareholders' meeting. Stelco's board was aware of that power when it accepted the two new directors. The Steelworkers say Farley made his decision because "these board appointments sparked a crisis in the court-approved capital raising (or) sale process" for Stelco. "Stakeholders perceived that the fox was in the henhouse and reacted strongly and negatively to the secret appointments ... The outcome of the process was jeopardized." The union says the judge was acting within his bounds when he made his ruling which essentially puts bankruptcy protection laws ahead of business laws, which normally govern a company's board. The stance is a marked contrast to earlier union statements. The Steelworkers have repeatedly accused Farley of overstepping his jurisdiction by putting bankruptcy laws ahead of labour laws. tperkins@thespec.com 905-526-4620 |