NEW YORK A number of RG Steel LLCs pending sales moved a step closer to resolution at a hearing Friday in U.S. Bankruptcy Court in Delaware, including setting a Sept. 7 hearing to settle a dispute over the sale of the bankrupt steelmakers stake in Ohio Coatings Co.
RG Steel had agreed to sell its 50-percent stake in Ohio Coatings to Esmark Steel Group LLC for $1.5 million in cash (amm.com, Aug. 1). On Wednesday, Esmark asked Judge Kevin J. Carey to compel the sale of the 50-percent stake in the tinplate producer after Esmarks funds wired for the sale were returned (amm.com, Aug. 30). The Chicago Heights, Ill.-based company said that it is imperative for the sale to move forward to allow it to negotiate tinplate contracts for 2013.
"RG disputes the notion that the value of (Ohio Coatings) is eroding. It disputes the notion that Esmark is entitled to close (the transaction)," RG Steel counsel said at Fridays hearing. "This will be opposed."
Counsel for both sides said they would present arguments and witnesses Sept. 7.
"We appreciate the courts prompt attention to our motion and look forward to the hearing and concluding this matter as quickly as possible," Esmark chairman and chief executive officer James P. Bouchard said in an e-mail to AMM.
Meanwhile, counsel for CJ Betters Enterprises Inc., the proposed purchaser of RG Steels Warren, Ohio, facility, has reached an agreement with an ArcelorMittal USA Inc. subsidiary over disputed property rights at the site, so the $16-million sale of the facility can move toward closing, ArcelorMittal counsel said during the hearing.
Counsel for CJ Betters Enterprises, ArcelorMittal and RG Steel did not respond to requests for comment.
Also during the hearing, counsel for RG Steel and Mountain State Carbon LLCa joint venture between RG Steel and Severstal NAsaid that RG Steel would no longer be running the facility as of Sept. 1, although RG Steel would retain its 50-percent ownership in the venture. Severstal declined to comment.
Prior to the RG Steels financial troubles, the two steelmakers had been sharing coke output from the Follansbee, W.Va., facility, but a West Virginia judge issued an injunction against RG Steel from taking any more coke from the facility due to its failure to pay for the material. Three of the Follansbee plants coke batteries were subsequently put on hot idle (amm.com, June 8).