Geneva still negotiating plan to pay its creditors

Bankrupt Geneva Steel is continuing negotiations over three competing reorganization plans that would provide different payoffs to the company's unsecured creditors.

On Monday, U.S. District Judge Glen E. Clark continued a status conference to Dec. 20, allowing more time for parties to reach a consensual plan.

All of the plans would pay secured creditors 100 percent of their claims, which total roughly $128 million. The creditors include:

• The U.S. government, owed $105 million. Through the Emergency Steel Loan Guarantee Act, the federal government backed a CitiCorp USA loan to the now-defunct steelmaker. When Vineyard-based Geneva defaulted on the loan, the government paid CitiCorp 85 percent of the loan.

• New York-based Albert Fried & Co. LLC, owed $16 million.

• Connecticut-based Silver Point, owed $7 million. Silver Point purchased CitiCorp's claim and has filed a competing reorganization plan.

While secured creditors will be paid in full, the reorganization plans differ as to what Geneva's unsecured creditors will be paid.

The three plans include:

• Geneva's plan, which proposes to pay unsecured creditors $50 million to $60 million.

• Sandy-based Anderson Development LLC's plan, which would pay unsecured creditors $40 million.

• Silver Point Capital's plan, which proposes a payoff to unsecured creditors of $20 million.

Unsecured claims against Geneva amount to $60 million to $80 million.

The sell-off of Geneva's assets is expected to bring in $205 million, enough to satisfy Geneva's claims.

Geneva Steel chief executive Ken Johnsen told the Deseret Morning News earlier this month that the language in the Anderson plan is ambiguous as to what unsecured creditors will be paid. However, Michael Hutchings, an attorney for Anderson Development, main-

tains that unsecured creditors will be paid $40 million.

The issue with Silver Point, Johnsen said, is trying to elicit an offer that would be attractive to unsecured creditors.