Stelco special committee report reveals no management or board forecasting misconduct

By Caroline Salls

Pittsburgh, Sept. 22 - Stelco Inc.'s special officer of the court Coulter Osborne reported the findings of a court-appointed special committee Wednesday that clears the company's senior management, chief restructuring officer, court-appointed monitor and the company's board of directors from misconduct related to the company's financial forecasting, according to a company news release.

The appointment of the special committee and special officer were prompted by the Aug. 31 resignation of directors Roland Keiper and Michael Woollcombe, which brought to issue the conduct of Stelco's senior management, chief restructuring officer, court-appointed monitor and the board, according to the report.

The complaints reflected concerns about effective board oversight of recently prepared forecasts that are important to the restructuring plan filed by the company.

The primary issues the special committee identified in the Keiper and Woollcombe resignation letter were related to the role of management in Stelco's forecasting process, including any conflict of interest on management's part and the board's general role in forecasting.

Specifically, Osborne's report said the letter of resignation criticized the board's approval of the Aug. 12 forecast, which raised questions for the special committee.

Osborne said the board acted responsibly in considering all aspects of the forecast it was presented.

Osborne also said in his report that he is satisfied that there was no conflict of interest on management's part and that no member of senior management has any kind of affiliation with any particular stakeholder.

"There is no doubt that management wants to see a viable company emerge from the restructuring process," the report said.

Also, Osborne's report said nothing in the special committee's investigation compromised the role of the chief restructuring officer.

Rather, the report said Keiper and Woollcombe "may have viewed the CRO with some suspicion because of a statement he made early on in the process that Stelco's equity value was suspect."

Stelco, a Hamilton, Ont.-based steel company, filed for bankruptcy under the Companies Creditors' Arrangement Act in the Ontario Superior Court of Justice on Jan. 29, 2004. Its case number is 04-54306.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.