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LTV's exit leaves workers, retirees struggling for care

Sunday, September 01, 2002

By Jim McKay, Post-Gazette Staff Writer

The steel industry failed Robert DeMeo's family this year.

DeMeo, a 71-year-old retiree from LTV Steel's defunct Pittsburgh Works, was one of the 85,000 retirees who lost company-paid health-care coverage in April after debt-laden LTV stopped production and sold its assets in bankruptcy court.

Retired steelworker Frank Farkasovsky, of Ambridge, at a meeting on health benefits in Monaca in March. (Martha Rial, Post-Gazette)

DeMeo's son-in-law, Jack Martin, lost his job this month when J&L Structural Steel, which was spun out of LTV Steel during its first bout with bankruptcy in the 1980s, opted to close after a court-approved sale of the bankrupt business collapsed.

The LTV bankruptcy and subsequent loss of health coverage affected at least 12,000 local LTV retiree families such as DeMeo's who worked for the company in Pittsburgh or at the former Aliquippa Works.

The abrupt demise of J&L Structural affects only about 100 workers, but the results were devastating to those involved. The shutdown came with no 60-day plant closing notice, no severance and no distribution of accumulated vacation pay. Employee defined contribution and 401(k) pension plans are in legal limbo since the plan administrators have resigned.

"We can't even touch our money and we don't seem to be getting any response," Steve Ostoffie, a 14-year employee of J&L Structural , said last week.

A bankruptcy judge has dismissed the Chapter 11 case, allowing Congress Financial Corp. of New York, a secured creditor, to liquidate. Money due workers is not expected to be paid unless a sale exceeds the amount owed to the lender.

David Jury, assistant general counsel for the United Steelworkers union, which represents J&L Structural employees, said it is unlikely that employees will ever be made whole. "It's a very unfortunate and difficult situation.'

The union is trying to work out a compromise with lawyers representing the defunct company so that it can meet its pension obligations. An alternative is a lengthy lawsuit under the Employee Retirement Income Security Act.

As for LTV Steel, the federal Pension Benefit Guaranty Corp. has assumed responsibility for three underfunded steel pension plans that cover about 82,000 former employees and retirees.

The plans together had liabilities of $4.4 billion and assets of almost $2.2 billion, meaning they were underfunded by $2.2 billion. Their termination was by far the largest and most costly in the 27-year history of the PBGC, the federal agency that insures defined benefit pension plans.

Among LTV retirees, many have found replacement insurance coverage that they must pay for on their own. Others such as Calvin Anderson, 62, of Cleveland, is doing without.

Anderson, in Pittsburgh this month to protest a visit by President Bush, said his wife, Vicky, has multiple sclerosis, for which she must spend $975 a month for medicine.

"We have no insurance, nothing," Anderson said.

Jim McKay can be reached at jmckay@post-gazette.com or 412-263-1322.

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