Troubled Kaiser Steel Corp., which is operating under bankruptcy law protection, said Monday that it has named a new chief executive as part of a management change negotiated with creditors early this year.
Richard E. Stoddard, a Denver lawyer and certified public accountant, was selected following a three-month national search conducted by a division of Price Waterhouse & Co. Stoddard, 37, most recently was managing director of Roath & Brega, the law firm representing Kaiser Steel's retirees.
Under the reorganization plan submitted in March, Kaiser Steel's 6,000 retirees will become major shareholders in the company after it emerges from bankruptcy proceedings. It will be renamed Kaiser Holdings.
In February, 1987, Kaiser Steel filed for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code, which allows a company to continue operating while it works out a plan to pay its creditors.
Three Key Projects
Kaiser Steel has sold much of the company, including its steel business. It is anticipated that the company's coal operations will become the property of the secured creditors following the reorganization, Stoddard said.
Stoddard replaces Bruce E. Hendry as chief executive. Hendry will continue as president and chairman of Kaiser Steel until final approval of the reorganization plan.
Hendry then will resign both positions but will remain as a director of Kaiser Holdings. Hendry will continue to oversee the coal operations.
Kaiser Steel's future rests on the success of three projects: the development of a 1,200-acre industrial park in Fontana, the development of a solid waste dump at the company's abandoned Eagle Mountain iron ore mine and the expansion of an existing waste treatment plant in Fontana.
"It's clearly a huge opportunity and there are clearly some downsides," Stoddard said. "There is clearly a risk that we will not be able to make it happen. Obviously, I wouldn't have taken the job if I thought the possible upside didn't justify the risk."
Stoddard said the reorganization plan could be approved by early fall.
Under the plan, two trusts for retirees would receive 58% of the company's new common stock. The Pension Benefit Guaranty Corp., which assumed retiree medical benefits last year, will receive 24% of the stock.