RG Steel files for Chapter 11 bankruptcy

May 31, 2012 | 04:21 PM | Chris Prentice

Tags  RG Steel, bankruptcy, Sparrows Point, Severstal, Wheeling Corrugating, Ohio Coatings, Moutnain State Carbon, chris prentice

NEW YORK — RG Steel LLC has filed for Chapter 11 bankruptcy protection, citing estimated assets and liabilities of more than $1 billion and between 1,000 and 5,000 creditors, including business partners, brokers, raw material providers and energy suppliers.

The Sparrows Point, Md.-based steelmaker and its wholly owned subsidiaries filed petitions with the U.S. Bankruptcy Court in Delaware, claiming cost pressures and a weakening steel market—as well as a multimillion-dollar claim against former asset owner Severstal U.S. Holdings LLC—were largely behind its liquidity issues.

"Despite the company’s aggressive cost-reduction efforts, significant improvements in its cost structure and substantial investment capital, the company has been unable to overcome the impact of the continued deterioration of the market and the inability of the industry to sustain a meaningful recovery," chief executive officer John Goodwin said in a statement Thursday.

The bankruptcy filing will allow the company to use a court-supervised process to "implement an orderly asset preservation plan and explore other options, including soliciting offers to purchase all or certain of the company’s assets," Goodwin said. "We have already begun a sales process aimed at maximizing value for all stakeholders and preserving the jobs created when RG Steel acquired these facilities."....