A key question for thousands of Baltimore steelworkers and dependents left unanswered as RG Steel’s bankruptcy hearing rushed to a conclusion yesterday: when will the property be sold?

And what obligations does the current owner, RG Steel, have to the workforce of Baltimore’s biggest industrial employer before the closing date?

No mention of a sale date was made during the hearing before U.S. Bankruptcy Judge Kevin Carey in Wilmington, but a copy of the sale agreement was placed on the court docket last night.

It states that the sale of Sparrows Point to liquidator Hilco Industrial and property redeveloper Environmental Liability Transfer (ELT) should take place by the 30th day following entry of the sale order.

That would place the closing date anytime before Sept. 15.

But a handwritten side note to the agreement says the closing could be extended to Sept. 28 to secure approval under the Hart-Scott-Rodino Act (which requires pre-notification and approval by the Department of Justice and Federal Trade Commission).

When Will Benefits End?

In the interim, what will happen to the supplemental benefits currently being paid by RG Steel to 1,600 laid-off steelworkers?

So far neither RG Steel nor the United Steelworkers union (USW) has offered a definitive answer. But it appears that the benefits will be terminated shortly.

RG Steel is about to lose its DIP (debtor-in-possession) financing by its bank lenders. This means the company will soon be out of cash. The bankers are in no mood to offer more money in return for assets that have sold substantially below what was originally estimated to be the lowest auction price.

RG Steel has not yet asked Judge Carey to terminate payment of supplemental unemployment (SUB), dental, vision and life insurance to Sparrows Point employees, as well as health and retiree benefits.

But USW Local 9477 President Joe Rosel warned the workforce that “the bankers are putting pressure on RG to end these benefits immediately.” He added, “The union is trying to negotiate very short extensions of the benefit programs.”

Open Shop at Sparrows?

A final point of yesterday’s sale order underscores what The Brew reported earlier this week: Hilco and ELT are under no obligation to continue any relationship with the current employees of RG Steel – or to renegotiate a new contract with the USW (known as the “successorship clause”).

A lawyer for Hilco said that the group planned to “market” Sparrows Point and would consider offers from companies to operate parts or all of the plant.

So far, though, no operating company has stepped forward to buy Sparrows Point since RG Steel declared bankruptcy on May 31.

Here is the relevant language clearing Hilco-ELT from obligations to the current workforce or union, which was signed late yesterday by Judge Carey:

“Purchaser shall have no obligation to pay wages, bonuses, severance pay, benefits (including, without limitation, contributions or payments on account of any underfunding with respect to any and all pension plans) or any other payments to employees of the Debtors [i.e., RG Steel].

“Purchaser shall have no liability with respect to any collective bargaining agreement, employee pension plan, employee welfare or retention, benefit and/or incentive plan to which any Debtors are a party (including, without limitation, arising from or related to the rejection or other termination of any such agreement), and Purchaser shall in no way be deemed a party to or assignee of any such agreement, and no employee of Purchaser shall be deemed in any way covered by or a party to any such agreement, and all parties to any such agreement are hereby enjoined from asserting against Purchaser any and all claims arising from or relating to such agreement.”

The USW did not sign the list of parties before the bankruptcy court yesterday.

There was no material presented by the union, and very limited remarks were made by the lawyer for the Official Committee of Unsecured Creditors of which the USW is a member.