Six more months needed to close old Essar Steel Algoma insolvency files

A New Year's Eve deadline to tie up loose ends on the company formerly known as Essar Steel Algoma Inc. will not be met.

Yesterday in Toronto, Superior Court Justice Glenn Hainey agreed to allow another six months to finally wrap up the firm's four-year-old insolvency case.

Officially but inelegantly re-named Old Steelco Inc., the former owner of the Sault's steel works will now remain under protection from creditors until June 30, 2020.

Ernst & Young Inc., the monitor overseeing the file, asked for the deadline extension to wind up three remaining issues:

• marketing and sale of certain freehold real properties in northern Ontario that continue to be owned by Essar Steel or related companies
• completion of the process of adjudicating priority claims from creditors
• outstanding taxation issues

In a report submitted last week, Ernst & Young's Brian Denega said the term lenders and senior noteholders who took over the company one year ago assumed responsibility on June 21 for the wrap pension plan covering employees of the original Algoma Steel Inc. prior to its acquisition by Essar. All remaining interest was transferred to the wrap plan on Sept. 9.

Denega said the northern Ontario legacy properties remain unsold but "discussions with interested parties and relevant stakeholders continue" and he's optimistic that a transaction "may be consummated in the near-to-medium term."

Regarding priority claims, the monitor said that all submissions to a claims officer should be completed by the end of February. 

Left with no employees or operations and essentially no assets, the once-mighty Essar Steel Algoma is not expected pay back anything on trade debts incurred prior to Nov. 9, 2015.