NEW YORK Phoenix Services LLC has filed a complaint seeking injunctive relief against RG Steel LLC and the new owner of the bankrupt steelmakers former Warren, Ohio, facility in order to regain access to steel slag at the site.
The Kennett Square, Pa.-based mill services company alleges that BDM Warren Steel Holdings LLC, the new owner of the Warren facility, and related company CJ Betters Enterprises Inc. have barred Phoenix from reclaiming slag that it owns, according to documents filed in U.S. Bankruptcy Court in Delaware.
Phoenix Services had a contract with RG Steels Warren division to "transport, process and sell" blast furnace slag produced at the steel mill and had established a "handshake agreement" with the new owner to set up a contract to continue providing those services, according to the documents, and delayed removing any of its assets from the site while negotiations were ongoing.
But Phoenix said a Nov. 13 letter from CJ Betters Enterprises set out terms for a new agreement with BDM Warren that were considered "outside industry norms." BDM Warren also claimed ownership of all the processed and unprocessed slag at the site.
"The letter gave Phoenix four days to accept its offer," Phoenix Services said. If rejected, the slag services provider would have two weeks to leave the site or would have to pay a weekly storage fee of $5,000.
Representatives from CJ Betters Enterprises told Phoenix on Nov. 30 to leave the site by noon, and Phoenix has been "barred" from re-entering, according to court documents. "In bad faith, Betters is attempting to strong-arm Phoenix into an agreement that heavily favors Betters if Phoenix should refuse Betters outrageous terms."
Phoenix has asked a U.S. Bankruptcy Court judge to declare that it owns property at the Warren site and grant Phoenix 90 days to remove it. During a hearing Tuesday, the two sides said they were engaged in discussions to resolve the issue but counsel for both parties declined to comment further on the proceedings.
Through BDM Warren, CJ Betters Enterprises purchased the steel mill from RG Steel at bankruptcy auction for a final purchase price of $15.5 million (amm.com, Sept. 26).
The Warren steel mill has been idle since shortly after RG Steel filed for Chapter 11 bankruptcy protection, and BDM Warren has been looking into the viability of operating the mill, a company executive previously told AMM (amm.com, Oct. 19).