,000 pensioners; labor countered that had the pension fund been managed better, such a situation would never have been allowed to develop (Kelly, 2001).
When the union and management were unable to reach an agreement, the union formed an alliance with the company's unsecured creditors (those creditors who have the most to lose in a bankruptcy situation since they do not hold any physical collateral against their debt). Under this arrangement, pension benefits would be maintained, but the union agreed to job cuts totaling more than 1300 workers. In order for this agreement to move forward, LTV had to secure a $250 million loan with a government guarantee (the loan was available under a special federal program). Although LTV's CEO now maintains that he did not consider the cost savings under this plan to be significant enough to salvage the company at the time, LTV agreed to the deal and sought the loan. In order for the government guarantee to be obtained, however, the government required assurances from the banks that th
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