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LTV FILES MODIFIED CHAPTER 11 PLAN OF REORGANIZATION

 LTV FILES MODIFIED CHAPTER 11 PLAN OF REORGANIZATION
 DALLAS, Feb. 14 /PRNewswire/ -- The LTV Corporation today filed a


modified Chapter 11 Plan of Reorganization with the United States Bankruptcy Court for the Southern District of New York.
 The modified plan has the support of all major creditor groups.
 LTV Chairman and Chief Executive Officer David H. Hoag said, "It appears that all of the major creditor groups have reached a consensus on the economics of reorganization, conditioned upon the negotiation of a satisfactory steel labor agreement and the resolution of technical issues."
 Hoag said the company hopes to finalize a collective bargaining agreement with steelworkers over the next several weeks, and then schedule a hearing on the reorganization plan disclosure statement in late April or early May.
 The modified plan is premised upon the sale of LTV's aerospace and defense businesses, the restoration of three LTV Steel pension plans and the major restructuring that LTV's steel operations have undergone since 1986.
 All claims of the Pension Benefit Guaranty Corporation (PBGC) -- a major obstacle in the 5-1/2 year reorganization -- are resolved by a settlement agreement which provides a flexible means for LTV to amortize its unfunded pension liability over 30 years.
 Under the modified plan, recoveries for fully secured, priority and administrative claims are proposed at 100 percent in cash. Additionally, cash will be distributed to the steel pension plans and as partial recovery for unsecured creditors of the aerospace company.
 The principal form of recovery for unsecured creditors will be a newly issued common stock in the reorganized company. Existing common and preferred stock will be canceled. After reserving shares to be contributed to the pension plans and shares to be sold to the PBGC, the company expects to issue 50 million shares for distribution to creditors.
 LTV's investment bankers estimate that the value of the new common stock will range from about $600 million to $950 million on a "fully distributed" basis. On a per share basis, the value is estimated to be from $8.68 to $15.44, depending on the then prevailing company, industry and economic conditions.
 Estimated recoveries for unsecured creditors, at the high end of the probable range of values, are as follow (In percent):
 Class Parent Steel Aerospace AM General Energy
 Senior 22.0 17.6 53.8 NA NA
 General 14.4 15.6 52.5 15.0 10.0
 Subordinated 7.2 7.8 35.0 NA NA
 Current common and preferred shareholders will receive warrants valued in aggregate at $5 million. The warrants entitle their holders to purchase shares of new LTV common stock at a fixed price over a five-year period. They will trade on the open market.
 Estimated values to be received by current shareholders include $3.43 per 100 shares of old common stock, $40.07 per 100 shares of Class A preferred, $5.34 per 100 shares of Class B preferred, $20.03 per 100 shares of Class C preferred and $5.02 per 100 shares of Class D preferred.
 In addition to common stock, the plan provides various other forms of recovery for unsecured creditor classes, the PBGC and pension plans, including contingent value rights (CVRs), stock appreciation rights (SARs), warrants, litigation proceeds, liquidating trust assets and, in the case of aerospace unsecured creditors, cash.
 The CVRs and SARs resulted from negotiations between the PBGC and other creditor groups. They are a mechanism to preserve the equity of distributions should the new LTV stock trade significantly below or above projected ranges.
 "Both the amended plan and the PBGC settlement agreement represent compromise on the part of all parties involved in the reorganization," Hoag said.
 To facilitate reaching an agreement, the PBGC agreed to accept a 30-year zero-coupon note in settlement of approximately $500 million in advances to the pension plans and to waive past due premiums and expenses. The PBGC also will purchase $50 million of the new LTV common stock, the proceeds of which will be contributed to the pension plans.
 The settlement agreement with the PBGC takes into consideration the cyclical nature of the steel industry and recognizes the necessity to make the pension plans affordable for the post-Chapter 11 company. The most significant elements of the settlement are:
 -- An initial contribution to three steel pension plans of
 $1.19 billion in cash and $126 million in common stock;
 -- Contributions to the plans of amounts realized from certain
 "non-core" assets; and
 -- Annual fixed payments of $50-$60 million plus a variable
 payment of 50 percent of cash flow, as defined.
 The non-core assets consist primarily of funds due LTV from trusts established to guarantee employee benefits for a specific period of time after the sale of the Warren steel plant and the steel bar division. This category also includes notes resulting from asset sales.
 Under the reorganization plan, LTV estimates that about $6 billion of claims, exclusive of pension claims, will ultimately be allowed. An approximate breakdown would include $410 million of secured and priority claims, primarily against LTV Steel; $2.3 billion of unsecured public and private debt against both LTV and LTV Steel; and $2.6 billion of other unsecured claims, primarily trade payables and claims for rejected executory contracts.
 Some large claims, such as the value of the collateral securing the J&L mortgage bonds and an IRS excise tax claim now in litigation, must be resolved before confirmation of the plan. The company will withhold stock or cash from distribution in amounts adequate to satisfy these disputed or unresolved claims.
 LTV sought Chapter 11 protection for itself and 66 subsidiaries in July 1986 and has been in reorganization since that time.
 A more detailed explanation of distributions and recoveries follows, including a summary table of estimated claims by class along with their estimated recoveries.
 Appendix 1
 Types of Non-Cash Assets to be Distributed
 New common stock will be the principal form of recovery for unsecured creditors. The parent and steel creditor groups will receive stock on a parity basis, based on each group's estimated claim amounts. LTV's investment bankers estimate the value of the new common stock will range from approximately $600 million to $950 million on a "fully distributed" basis. After consideration of shares to be contributed to the pension plans and shares to be sold to the PBGC, the company expects to issue 50 million shares for distribution to creditors. The fully distributed price per share is estimated to be from $8.68 to $15.44.
 Contingent Value Rights (CVRs) will be distributed to some unsecured creditors and to the restored pension plans. These rights are being issued by the PBGC and provide for a maximum payment by the PBGC of up to $96.25 million if the new common stock of the company fails to achieve a certain agreed-upon trading value as of six months after the effective date of the plan.
 Stock Appreciation Rights (SARs) will be issued to the PBGC and will entitle the agency to receive additional shares of new LTV common stock if the new common stock exceeds a certain agreed-upon trading value, as of one year after the effective date of the plan.
 Series A warrants will be distributed to some unsecured creditors and to all preferred and common equity holders. The warrants will entitle the holders to purchase shares of new LTV common stock at a price equal to 110 percent of the new LTV common stock six months from the effective date.
 Litigation proceeds realized from the Lower Lake Erie Iron Ore antitrust litigation will be distributed to parent and steel unsecured creditors, the PBGC and the pension plan.
 Liquidating trust assets are comprised of the company's interests in reversionary trusts established in connection with the sale of its Warren steel plant and its steel bar division. It also includes any amounts to be received on notes due from Gulf States Steel Company and the bar company. All of these assets are to be contributed to the pension plans, except the amounts received from the bar trust above $90 million, which are distributed to the PBGC.
 Appendix 2
 Recovery Components For Unsecured Creditors:
 Parent Creditors: Common stock, warrants valued at
 $21 million, one-third of the railroad
 antitrust litigation proceeds above
 $50 million to $125 million, pro-rata
 share of one-third of the litigation
 proceeds above $125 million.
 Steel Creditors: Common stock, CVRs, the first
 $50 million of the railroad antitrust
 litigation proceeds, pro-rata share of
 one-third of the litigation proceeds
 above $125 million.
 Aerospace Creditors: $62 million of cash, common stock.
 AM General Creditors: Common stock.
 Energy Creditors: Common stock.
 Equity Holders: Warrants valued at $5 million.
 PBGC: Zero-coupon notes, SARs, one-third of
 the railroad antitrust litigation
 proceeds above $50 million, Bar trust
 proceeds above $90 million.
 Pension Plans: Cash, the investment tax credit
 refund, all liquidating trust assets
 except Bar trust proceeds above $90
 million, future payment commitments,
 stock contributions, CVRs, one-third of
 the railroad antitrust litigation
 proceeds above $50 million.
 Appendix 3
 The LTV Corporation
 Plan of Reorganization
 Creditor Recoveries (1)
 Recoveries Based on
 Common Stock price of
 $15.44 per share $8.68 per share
 Parent Creditors
 Secured/Priority/Administrative 100.0 100.0
 Senior 22.0 12.4
 General 14.4 8.1
 Subordinated 7.2 4.0
 Steel Creditors
 Secured/Priority/Administrative 100.0 100.0
 Senior 17.6 10.2
 General 15.6 9.1
 Subordinated 7.8 4.5
 Aerospace Creditors
 Secured/Priority/Administrative 100.0 100.0
 Senior 53.8 40.0
 General 52.5 39.1
 Subordinated 35.0 26.1
 AM General Creditors
 Secured/Priority/Administrative 100.0 100.0
 General 15.0 8.4
 Energy Creditors
 Secured/Priority/Administrative 100.0 100.0
 General 10.0 5.6
 (1) Creditor recoveries include all species (cash, common stock,
 warrants, CVRs) except litigation proceeds. See disclosure
 statement for complete explanation.
 Estimated Value to be Received by Holders
 of Old LTV Equity Per 100 Shares
 Old common stock $ 3.43
 Old Class A preferred stock 40.07
 Old Class B preferred stock 5.34
 Old Class C preferred stock 20.03
 Old Class D preferred stock 5.02
 -0- 2/14/92
 /CONTACT: Charles M. Palmer, 214-979-7941 or Jim Bowman, 214-979-7981, both of LTV/
 (LTV) CO: LTV Corporation ST: Texas IN: ARO SU: RCN


JT -- NY030 -- 0189 02/14/92 12:04 EST
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Date:Feb 14, 1992
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