Many of the retirees strongly disagree. "If it wasn't for Hendry, we wouldn't have had anything," said Ronald Bitonti of Fontana, who represents fellow Kaiser Steel retirees on the benefits association board and is an international representative for the United Steelworkers of America. "The people who caused the company to go bankrupt were Monty Rial and Frates and that gang. They raped the company."
Though the company has settled with Rial, it is still suing Frates, contending that he fraudulently made $40 million on his original $1-million investment. Part of Frates' take was a valuable piece of Fontana real estate which he later used as collateral to buy failing State Federal Savings & Loan and its development subsidiary in Tulsa. KSC Recovery hopes to at least get back $11 million from the sale of that property being held in escrow by the Resolution Trust Corp., which now controls the savings and loan.
Also pending are actions against a number of shareholders, their brokers, investment bankers and other professional advisers, including Drexel Burnham and First Boston. KSC Recovery wants to recoup some of the gains investors realized during the rapid succession of takeovers, as well as fees Kaiser Steel paid to consultants for what KSC Recovery now believes was bad advice.
Despite the number of lawsuits, few expect the settlements or proceeds to return Kaiser to the days when it was cash-healthy and asset-wealthy.
But nearly everyone involved in the drama believes that there's a gold mine in the assets of Kaiser Steel Resources.
The "gold mine" is actually Eagle Mountain, the iron ore mine about 60 miles due east of Palm Springs that, in 40 years of operation, yielded millions of tons of ore for use in Kaiser's steel-making operations.
Kaiser, now based in Rancho Cucamonga, plans to turn the Eagle Mountain site into a landfill. "We made some extremely large holes in the ground there. It could take care of Los Angeles County and surrounding areas' landfill problems for the next 100 years," said retiree Rickard.
Kaiser's own Eagle Mountain train, which used to ship the ore to the Fontana plant, would be used to transport the refuse over Southern Pacific railroad lines to the site.
The plan for Eagle Mountain, which still has some regulatory hurdles to overcome, is one of four primary focus areas for Kaiser Steel Resources, all of which rely on assets that once were devoted to steel-making operations.
* An industrial park at the former steel plant in Fontana. The company owns nearly 1,000 acres of land there, in prime Inland Empire industrial country. That figure includes a 288-acre parcel reclaimed by KSC Recovery as part of the settlement of its suit against Rial, but not the nearby parcel that Frates got.
* Fontana Union Water Co., which provides water to the Fontana area.
* A waste treatment plant in Fontana.
Where the old Kaiser Steel was a struggling company in a declining industry, the reorganized firm views itself as being in growth businesses. And most observers agree.
"Kaiser is a gold mine for its present owners (because of) assets it had all along," said attorney Schwab.
The problem for many retirees is waiting for those assets to start producing a flow of cash. The benefits group estimates it will cost $4 million to $5 million annually to provide what amounts to half the former health benefits, with insurance costs still taking double-digit leaps each year.
Some retirees who were young enough at the time of the bankruptcy found jobs and benefits elsewhere. Some have died. And others suffered through many months without benefits.
"We had some older people on small pensions who were ill when we lost hospitalization (benefits), and their doctors were giving them prescriptions they couldn't afford to have filled," said Thomas Rabone, who after 33 years at Kaiser retired when the mill was shut down 1983.
Right now, the retirees' portfolio is all Kaiser stock. "They need cash to fund their liabilities," said Scott L. Beiser, managing director of Houlihan, Lokey, Howard & Zukin, a Los Angeles-based banking firm that is advising the employee benefits association about managing its assets. Beiser said the company's return to the public stock market will give retirees the option of liquidating some of their assets and diversifying into a more traditional portfolio.
For the roughly 6,000 retirees still being served by the medical and pension plans, that option is a welcome relief.
"A little bit of the bitterness has worn off," said Rabone. "All we have left now is the company and the success of the company to subsidize retirees with health and medical needs. We've promised to get as much as we can and as soon as we can, but it's unrealistic to think we'll recover a major portion of what (we) lost."