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Alexin sues broker over mixed aluminum scrap

Jul 02, 2013 | 06:25 PM |

Tags  scrap, aluminum, Alexin, Olympic Metals, billet, Christos Gorgias, Sean Davidson

NEW YORK — A dispute between an aluminum billet producer and a scrap broker over a truckload of scrap has escalated to the legal system, much to the surprise of the broker.

Bluffton, Ind.-based Alexin LLC filed a lawsuit July 1 in U.S. District Court in Indiana against Miami-based Olympic Metals LLC alleging breach of contract—a claim that Olympic Metals said it strongly denies.

Alexin said in court documents that it ordered 40,000 pounds of 2024 aluminum scrap in April, but claimed that the 37,195 pounds delivered by Olympic Metals also included some lithium-containing 2090 alloy scrap.

"Alexin melted down the 2024 aluminum that Olympic Metals had supplied. After adding pure aluminum and otherwise finished the product, Alexin noted that the finished aluminum ingots had an unacceptable and unsalable surface condition," Alexin alleged in the lawsuit. "Emergency investigation and analysis revealed that the unsalable ingots contained excessive levels of the element lithium. As a result of the lithium contamination, the ingots were worthless and were scrapped." Alexin estimated its total damages at $91,518.

According to a copy of the purchase order filed with the lawsuit, Alexin had agreed to pay 84.5 cents per pound for the material for a total estimated price of around $33,800. After delivery, Olympic Metals demanded a final payment of $31,477—money that Alexin said it hasn’t paid because it is "exercising its right to a setoff, which Olympic Metal disputes," according to court documents.

Alexin claimed in the lawsuit that Olympic Metals subsequently "admitted that the aluminum scrap delivered on April 25, 2013, was non-conforming to Alexin’s purchase order."

When contacted July 2, Christos Gorgias, managing director of Olympic Metals, said the company was unaware of Alexin’s legal filing. "We filed a demand letter for payment after Alexin went past the payment date. Following that, we even requested mediation, which they did not accept. We had no idea they sued us and we will fight these allegations with documents that prove we are not in breach," he told AMM.

Gorgias said that Olympic Metals delivered about 29,000 pounds of 2024 alloy scrap and 8,000 pounds of 2090 scrap in segregated lots. "If they didn’t want the 2090 scrap, they could have let us know and we would’ve taken it back. In any case, I don’t know how it could cause damage when the scrap was segregated," he said.

Olympic Metals’ June 20 letter to Alexin demanding payment—sent by a Miami law firm—included a shipping order detailing the different loads of 2024 and 2090 scrap, and noted that "the scrap was inspected, accepted and, to our understanding, consumed by Alexin."

Alexin’s counsel did not respond to a request for comment, while a company spokesman said July 2 that Alexin had no further comment other than to say Olympic Metals "just didn’t ship what was ordered and they need to come clean about it as most people usually do."

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