[Congressional Record Volume 145, Number 44 (Friday, March 19, 1999)]
[Senate]
[Page S2985]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MORNING BUSINESS
Mr. STEVENS. Mr. President, I ask unanimous consent there now be a
period for morning business with Senators permitted to speak therein
for not to exceed 10 minutes, and that this period expire at 11 a.m.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SHELBY. Mr. President, I was pleased to cosponsor the provision
of the Senator from West Virginia for an Emergency Steel Loan Guarantee
program when the Committee on Appropriations reported the bill to the
Senate earlier this month. I felt then, as I do now, that many steel
companies have suffered significant economic injury as a result of the
illegal dumping of foreign steel. In my own State of Alabama, at least
one steel mill I know of is now teetering on the brink of bankruptcy
due to this illegal activity. I was, therefore, very pleased by the
Senator from West Virginia's effort to address this problem and provide
some short-term needed relief to our steel companies. I know Senator
Sessions shares my support for this provision because of our concern
with the plight of local steel mills in our State of Alabama.
Mr. SESSIONS. Mr. President, I too am concerned with the dilemma
facing our local steel mills in Alabama and I want to commend the
Senator from West Virginia for his leadership, working, in a bipartisan
manner with Senators from all the steel-producing and other adversely
affected states, to address the substantial economic injury that the
illegal dumping of imported steel has caused across the country through
an Emergency Steel Loan Guarantee program, which is to be part of the
Emergency Supplemental appropriations bill, for the fiscal year ending
September 30, 1999. My understanding is that the intent of the
Emergency Steel Loan Guarantee program is to afford all qualified steel
companies with the opportunity to obtain a loan guarantee, whether or
not the company is now or is placed in a situation where it must seek
to reorganize under Chapter 11 of the United States bankruptcy laws
before the end of this year? Is my understanding of the program
correct?
Mr. BYRD. The Senator is correct.
Mr. SHELBY. As you know, several companies have already been forced
into bankruptcy because of the ``critical circumstances'' that these
unprecedented levels of imports have caused--Acme, Laclede, and Geneva
Steel come to mind--and that several other companies are in a
distressed financial condition, including companies in West Virginia
and Alabama. Senator Sessions and I have met with the workers of steel
companies on numerous occasions since this crisis started last fall. We
have been told that because of this dire situation, companies are no
longer able to borrow money in the private sector because of the
disruptive and uncertain market. In which they must operate and that
the immediate implementation of the Emergency Steel Loan Program is
essential to the continued viability of these companies. It is my
understanding that this programs is specifically designed to encourage
the private sector to make such loans available and that the Board will
expedite its review of loan guarantee applicants that are in immediate
need of such financial assistance.
Mr. BYRD. The Senator is correct. The Emergency Steel Loan program is
designed to provide immediate access to necessary working capital and
to allow companies to refinance long-term debt obligations on
reasonable terms and conditions, which will improve their immediate
cash flow positions so they can stay in business until this crisis
passes. We do not want to have companies be deprived of on economic
life-line when they are drowning and need a helping hand.
Mr. SESSIONS. As you know, the Senate Judiciary Committee, of which I
am a member, spent a great deal of time last year examining the
bankruptcy law and how to improve it for both doctors and creditors, I
am particularly concerned that companies that seek to reorganize under
Title 11 of the U.S. Code, are not precluded from obtaining a loan
guarantee under this program since by definition the debts of such
companies exceed their assets. Let me be specific, if a company does
not have traditional forms of available ``security,'' such as is
defined in the 11 U.S.C. Sec. 101, would the Board consider an order of
the federal bankruptcy judge finding that a guarantee is necessary to
enable the company to operate its business or reorganize meets that
requirement?
Mr. BYRD. The Senator is correct that the bill was written so that
``security,'' as defined in the bill, would cover such a situation,
however if further clarification is required we will work to address
that and similar issues so that such companies are not excluded from
the assistance provided in this emergency loan program.
Mr. SHELBY. Is it the Committee's intent that the Emergency Steel
Loan Guarantee Program, established under S. 544, be made available to
all qualified steel companies that satisfy the requisite security
requirements in section (h)(2) at the time loan commitment is made as
well as available at the time the loan becomes effective, regardless of
whether or not a qualified steel company is now or could be required to
reorganize under Chapter 11 of Title II of the U.S. Code?
Mr. BYRD. The Senator is correct, and if necessary we will clarify
that further.
Mr. SESSIONS. The power of a United States bankruptcy court already
provide that a court may issue any order that is necessary or
appropriate to carry out its responsibilities of the bankruptcy law to
protect the custody of the estate and its administration. Specifically,
11 U.S.C. Section 364 requires a debtor to obtain the permission of the
court as a prerequisite to incurring additional credit. If a United
States bankruptcy court determines that a qualified steel company under
its jurisdiction requires the immediate access to a guarantee in an
amount less that $25 million, would that company be precluded from
participating in the program because it has an immediate need of a
lesser amount of guarantee than specified in section f(4)?
Mr. BYRD. That was not the intent of the Committee and we would
expect the Board to afford substantial deference to such a
determination by a United States bankruptcy court and we will further
clarify that if required.
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