PITTSBURGH A metal
recycler operating in Ohio and Pennsylvania has filed for
Chapter 11 bankruptcy protection, citing an issue with its
lending institution as the main driver behind the move.
Medina, Ohio-based Ferromet
Corp. and New Castle, Pa.-based subsidiaries Ferrotech Inc. and
Ferrotech Realty LLC filed for bankruptcy late Tuesday in U.S.
Bankruptcy Court for the Western District of Pennsylvania.
"The reason this has happened is
we fell victim to what is happening to small businesses across
America and is purely a banking issue," president Mark
Heuschkel told AMM. "We had no other choice but to
take this move."
The decision to file for
bankruptcy protection was an emergency measure and the company
intends to recover from the setback, Heuschkel said, noting
that the companys operations are temporarily offline but
are expected to be restarted soon. "We temporarily shut the
yard down and we are working to get it reopened and resume
operations as we work through this," he said, declining to
provide a timeframe for the restart.
The companys New Castle
processing facility, which has shredding capabilities, operates
under the name Ferrotech, processing both ferrous and
Ferromet, the brokerage and
corporate arm of the business as well as the parent company of
Ferrotech and Ferrotech Realty, has estimated assets of less
than $50,000 and estimated liabilities of between $1 million
and $10 million, according to the bankruptcy filing.
Among Ferromets largest
unsecured creditors are a number of steel and scrap companies,
including Joe Krentzman & Sons Inc. and its related export
company ($601,328), AMG Resources Corp. ($543,951), Protrade
Steel Co. Ltd. ($480,897), SSAB Iowa ($104,117), Gallatin Steel
Co. ($44,292) and Severstal North America Inc. ($39,962).
NexTier Bank NA in Butler, Pa., reportedly holds the largest
unsecured claims, totaling more than $4.9 million.
Subsidiary Ferrotech listed
estimated liabilities of between $100,000 and $500,000, while
Ferrotech Realtys liabilities were put at between
$500,000 and $1 million.
Earlier this year, Hudson,
Ohio-based scrap broker ProTrade filed a $480,000 lawsuit
against Ferromet, alleging that the company was more than 90
days late in paying for scrap iron (AMM, Feb. 28). A
settlement conference originally scheduled for May 14 has been
cancelled as a result of Tuesdays bankruptcy filing,