GENERAL48298

• Permit No: M1977376
• IBM Index Class Name: General Documents
• Doc Date: 1/29/1999
• Doc Name: NOTICE OF HEARING ON MOTION DATED 01/22/99 FOR PRELIMINARY ORDER IN AID OF CONSUMMATION
• Media Type: D
• Archive: No

o(the Plan The Court shall retain junsdiction to enter such orders,
judgments, injunctions, and rulings.
Paragraph 54 of Debtors' Confirmed Plan provides in pertinent pan that the Reorganized Debtors
rmm~ly with annhrahlr law fnnnml hour advicrvl Rrnroanirrd CFR•I that (ailnrr in cmm~ly wish
its legal obligations with respect to the Prescription Drug Fund (as defined in section 1?) could
subject Reorganized CF&I to claims under the Employee Retiremem Income Security Act
("ER1SA")
5. The United Steelworkers of America, AFL-CIO (the "USWA"), on behalf
o(the US WA and Comter employees and retirees oC the Debtors repreunted by the USWA, filed a
Proo(o(Claim of USWA Against The Debtors And Certain Officers, Directors, Agents,
Employees, Representatives And Fiduciaries O(The Debtors For Retiree Contributions To The
CF&1 Dmg Plan (the "USWA Proo(O(Claim"), a copy of which is attached hereto and
i
incorporated herein by reference as Exhibit "A". Because the ultimate distribution of the
Prescription Drug Fund should resolve the USWA Proo(O(Claim against the Debtors and
t
Reorganized Debtors, jurisdiction also exists pursuant Io section 86 of Debtors Confirmed Plan
that provides in pMinent part that
...the Court will relain7urisdiction to the fullest extent pemdtted
by law including to enter any orders or to take any amion specified
in this Plan including, without lirtdtation, the following' (b) to
hear and determine all claims ... .
• b Pursuant to wllective bargaining agreements with the USWA, the Debtors
provided certain health and medical benefits (or eligiblt rttuees and their spouses (the
"Panicipanls") and their dependants Such benefits also were provided to retirees who had not
been affiliated with the USWA Under Debtors' Confirmed Plar4 the New VEBA assumed [he
responsibility (or such benefits.
One of the benefits made available to Participants was CF&1's
administration of a prescription drug prmgram (Ihe "Drug Program"), which was paid for entirely
by the Participants through deductions by the Debtors from the Panicipanb' monthly pension
pavmena (the "Participants' Contributions'")
As the March 3, 1997 Effective Date under Debtor's Confirmed Plan
approached, representatives of Ihe USWA and Ihe Debtors held discussimns concerning the
Irans(er of the unused portion of[he Participants' Contributions to the Drug Program, which was
then held in Debtors' general accounts The Trustees of the newly established CF&I Retirees'
Voluntary Employee's Beneficiary Association (Ihe "New VEBA"), created pursuant to section
501 (c)(9) of the Internal Revenue Cods and section S I under Class I of Debtors' Confirmed
Plan, agreed to provide a segregated depository account for the safekeeping o(such unused
portion of the Participants' Contributions to the Dnrg Program. Under cover ofCF&I Steel
Corporation's ("CF&I") lever dated March I, 1993, a copy ofwhich is attached hereto and
incorporated herein by reference ss Exhibit "B", the Debtors transferred 5749,000 (the
"Estimated Prescription Drug Surplus") to a special, segregated income-eartung account created
by the New VEBA to receive the Estimated Prescription Drug Surplus.
As set forth in paragraphs (I) and (2) of CP&1's March I, 1993 letter the
5749,000 figure was an estimated amount, subject to further audit by an auditor of the USWA.
I0. A total of 569,002.00 of the Estimated Prescription Dmg Surplus was
expended to rover prescription drug claims incurted by eligible retirees but not processed by the