Sherwin Alumina is asking a federal bankruptcy judge to approve a plant closure agreement with the United Steelworkers union that would pay $2,000 in severance to each eligible employee locked out of the company's 1.65 million mt/year refinery in Gregory, Texas, according to a filing Wednesday in the US Bankruptcy Court for the Southern District of Texas in Corpus Christi.
Sherwin locked out about 450 union workers on October 11, 2014, in a contract dispute that never was resolved before the company filed for Chapter 11 bankruptcy reorganization on January 11 and ultimately shut the refinery at the end of September.
In the new filing, Sherwin said the plant closure agreement resulted from recent negotiations with the union.
In addition to the severance payments, the closure agreement also would continue Sherwin's employee retirement benefits program through December 31 and budget sufficient funds to pay for claims related to the company's ongoing "wind down."
The USW's $38.3 million unsecured claim against Sherwin over pending grievances and retiree benefit obligations would be reduced to $2 million, with some of the proceeds from any claim distribution to be paid to five USW bargaining unit employees whose terminations were the subject of pending grievances.
A hearing on the proposed agreement is scheduled for Friday before Judge David R. Jones.
Sherwin is expected to file a reorganization plan soon with regulatory agencies that reflects the terms of the refinery closure plan and proposed sale of its assets to Corpus Christi Alumina, an affiliate of Commodity Funding, Sherwin's senior secured lender.
CCA submitted a high bid of $54.5 million for the assets in a court-supervised auction in April.
The judge recently approved Sherwin's request to retain its exclusive right to file a Chapter 11 reorganization plan and solicit votes for the plan. The company's exclusivity period to submit a plan now extends through December 31, with Sherwin having until March 1 to seek approvals of the plan.
