Lawyers overspend on Essar Steel tax case

Sault Ste. Marie City Council will be asked next week to approve an additional $50,000 for outside legal help in collecting almost $32 million in property taxes owed by Essar Steel Algoma Inc.

Al Horsman, the city's chief administrative officer, reports that lawyers have already overspent the $425,000 approved for the case by $33,000.

Algoma has been under insolvency protection since Nov. 9, 2015.

Last month, the city announced it had struck an agreement-in-principle cover the tax obligations with term lenders who propose taking over the steelmaker, allowing municipal services to be maintained at current levels even though the $32 million owing is equivalent to one-quarter of the annual tax levy.

"While the agreement-in-principle has abated significant need for external legal counsel, the city's lawyer and staff still need to be prepared to file court materials on short notice, seeking clarification or providing its response to any filings that may impede its priority status," Horsman says in a report to Mayor Christian Provenzano and city councillors.

"Throughout these proceedings, city staff has and will continue to complete all tasks possible, and has and will continue to involve the restructuring lawyers only as necessary," the CAO says.

Monday's City Council meeting will be livestreamed on SooToday starting at 4:30 p.m.