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
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
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).