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Geneva Steel's Demolition for Development Approved

Geneva Steel's Demolition for Development Approved

Posted - Oct. 27, 2004 at 10:28 a.m.



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PROVO, Utah (AP) -- A judge has approved demolition of bankrupt Geneva Steel's 1,750-acre plant in Vineyard to make way for a mixed-use residential, retail and light manufacturing development.

And the Geneva Steel board on Monday filed its Chapter 11 restructuring plan and disclosure statements detailing its proposal to settle the claims of its secured creditors and some 450 unsecured creditors.

At the same time, two Geneva creditors, Anderson Geneva LLC and Silver Point Capital L.P. of Greenwich, Conn., filed competing restructuring plans. All three plans are pending the approval of the U.S. Bankruptcy court.

While all three plans appear to support preparing the land for sale to other developers, they differed in the way in which the secured creditors are paid and how much the unsecured creditors would be paid, said J. Thomas Beckett, an attorney representing the unsecured creditors.

Beckett estimates the unsecured creditors are owed between $60 million and $80 million, while the secured creditors are owed at least $131 million.

Attorneys for creditors say the site is appraised between $170 million and $180 million.

Chief Bankruptcy Judge Glen E. Clark on Friday approved Geneva's proposal to demolish the site for a mixed-use development after Geneva's committee of unsecured creditors decided the mixed-use proposal was "more valuable" than one offered by California-based Sierra Railroad Co., Beckett said.

Sierra had planned to use the three blast furnaces at the Geneva site to burn landfill waste or oil shale, converting the products into high-quality gases, including natural gas.

The company had offered more than $20 million to buy about 900 acres of the Geneva property and other assets including blast furnaces, railroad tracks, conveyers and other equipment, water and emission credits.

The company dropped its plans to after the Friday ruling.

(Copyright 2004 by The Associated Press. All Rights Reserved.)

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