STEUBENVILLE - The U.S. Bankruptcy judge overseeing RG Steel's efforts to liquidate assets has authorized up to $20 million in bonuses for members of the company's management team if they can find buyers with deep pockets, spurring criticism from union leaders who say the payments would be a reward for driving the company into the ground.
Ten senior executives, including president and CEO John Goodwin, would be eligible for the bonus money if, among other things, they can sell RG Steel's assets at prices that would satisfy the company's senior creditors. Details of the court-approved bonus plan are under seal, so how much each stands to make isn't known.
However, no money would be distributed until the senior lenders - a list that includes Bank of America, General Electric, Merrill Lynch, UBS Securities and Wells Fargo - as well as junior lenders had been satisfied. Junior Lenders include Cerberus Business Finance and the Renco Group, parent company of RG Steel.
The trustee overseeing the sale as well as the committee representing RG Steel's unsecured creditors, including the United Steelworkers of America and Pension Benefit Guaranty Corp., objected to the bonus plan.
This morning, USW District Director Dave McCall could not be reached for comment. However, the USW's Santo Santoro called plans to reward the 10 executives "ridiculous."
"What's sad is they don't worry about the people," he said. "(Goodwin's) been with this company less than a year, and the only thing he's done is shut it down, and now (the 10 executives) are going to share $20 million. It doesn't make a bit of sense to me."
Several thousand steelworkers in Ohio, West Virginia and Maryland have been laid off, many of them here in the Ohio Valley. Some, off the job for months before RG Steel acquired the company in March 2011, have already exhausted their unemployment benefits.