In a previous post we looked at Essar Steel Algoma and its plans to seek protection under the Companies’ Creditors Arrangement Act, a business when facing financial difficulty. Now another Canadian steel company, U.S. Steel Canada (formerly Stelco), is in creditor protections while it looks for a new owner.
A previous effort to sell the business was unsuccessful and it recently sought court approval for a new sales process. A contentious issue is the role to be played by the company’s former parent U.S. Steel, which claims to be owed $2.2 billion.
The Ontario government and the company’s main union oppose the claim, saying such amounts were investments by U.S. Steel in its Canadian subsidiary, and not a loan.
Businesses facing financial hardship should be aware there are multiple options that may be available to reach a resolution. A bankruptcy lawyer can be of assistance in this.