Keywell creditors sue execs for $65M

Dec 20, 2013 | 03:59 PM | Rey Mashayekhi

Tags  Keywell, J. Mark Lozier, Prophet Equity, scrap, Chapter 11, bankruptcy, OmniSource, SA Recycling Schnitzer Steel Industries

NEW YORK — Creditors of bankrupt specialty scrap processor Keywell LLC are suing the company’s executives for more than $65 million for allegedly engaging in "a pattern of improper self-dealing" that saw them "lining their own pockets to the detriment of Keywell and its creditors."

The lawsuit, filed by the official committee of unsecured creditors of Keywell LLC, is part of the Chicago-based processor’s bankruptcy proceedings in U.S. Bankruptcy Court in Illinois. The committee—consisting of several creditors, including Fort Wayne, Ind.-based OmniSource Corp., Orange, Calif.-based SA Recycling LLC and Portland, Ore.-based Schnitzer Steel Industries LLC—laid out its allegations in a 48-page complaint that names Keywell president and chief executive officer J. Mark Lozier and chairman Joel D. Tauber among the defendants.....

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