March 29, 2005

Stelco’s monitor must revisit claim

TORONTO

An Ontario judge has ordered the court-appointed monitor overseeing the bankruptcy restructuring of Stelco Inc. to spend more time reviewing a $63-million claim by a company creditor.

Ontario Superior Court Justice James Farley has given Ernst & Young, which was appointed by the court as the monitor for Stelco’s restructuring early last year, until April 1 to review the claim by EDS Canada Inc.

Stelco outsourced its information technology requirements to EDS in 2002 in a 10-year deal that called for EDS to implement new systems to manage computer functions for orders, human resources, finance and other matters.

Now one of Stelco’s biggest creditors, EDS submitted its claim in January, saying it’s owed more than $63 million for debts and other fees Stelco failed to pay before entering creditor protection in early 2004. On March 8, the monitor reduced the amount EDS could claim to $40.5 million, but three days later, disallowed the whole claim.

Stelco returns to court on March 30, where Farley will hear the company’s motion to approve a change in its restructuring process.

The Canadian Press

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