By MIKI MEEK & HILLARY GUBLER
miki@du2.byu.edu
Sixteen-hundred Geneva Steel employees expect to receive paychecks Tuesday, but the company may not have sufficient funds for the $2.8 million payroll if a decision is not reached by Monday on the company's bankruptcy case in the U.S. District Court.
"We have enough cash for right now ... but if a decision is made by then we would literally be in liquidation," said Geneva Steel CEO Joseph A. Cannon.
Cannon said the company is now managing to stay financially afloat from sales.
Geneva Steel has not announced how it will react if the ruling on the company's bankruptcy case is delayed beyond Monday or their filing is rejected. Geneva Steel is proposing a $125-million loan from Congress Financial Bank under Chapter 11 bankruptcy.
"It's just inconceivable to me that this judge would (delay or reject the case). If he does we are just going to have to figure out what's going to happen," said Cannon.
Throughout the week, the company has had stakeholders, union members and bondholders testifying about the necessity of Chapter 11 bankruptcy to U.S. District Senior Judge J. Thomas Greene. Chapter 11 bankruptcy would allow Geneva Steel to restructure their debt.
On Tuesday, Judge Green appointed Alan Singer, a Chapter 11 examiner, to assess the viability of the company's future. Singer will be first to testify when the trial resumes today at 11 a.m. Final arguments will be given from Geneva Steel trustees, debtors, creditors and bondholders.
If a decision isn't reached today, Judge Green said a special session will be held Saturday to try and reach a conclusion before Monday.
"Everyone is keeping their fingers crossed for an early ruling," said Dorothy Boggs, spokesperson for Geneva Steel.
Since the company filed for bankruptcy on Feb. 1, the plant has had a somber atmosphere, said Tom Brandner, a Geneva employee. One-hundred employees have already been laid off this week, he said.
The company's financial problems stem from a $400-million loan obtained more than a decade ago to re-modernize the mill and competition from low-imported steel prices.
Copyright Brigham Young University 18 Feb 1999
