NEW YORK RG Steel LLC
says it should retain its security interest in Mountain State
Carbon LLC (MSC) but has been deprived of that stake by
Severstal U.S. Holdings LLC since its bankruptcy filing last
RG Steel further claimed that under its agreement with
Severstal, it should not be divested of its management rights
to Mountain State Carbon after filing for Chapter 11 bankruptcy
protection, according to documents filed Jan. 14 in U.S.
Bankruptcy Court in Delaware.
RG Steel is seeking a declaration from the court that it did
not cease to hold membership interest in Mountain State Carbon
after it filed for bankruptcy, according to the court
documents. The former steelmaker is also seeking an order
stopping Severstal from interfering with restoration of its
membership interest in the Follansbee, W.Va.-based coke-making
Severstal claims RG Steel owes and is liable to Severstal for
$100.7 million, an amount that is more than the value of the
bankrupt steelmakers stake in the Mountain State Carbon
operations (amm.com, Jan. 7). Severstal had asked the federal
court to relieve a stay motion that is keeping it from
enforcing a lien on RG Steels security interest in
Mountain State Carbon.
MSC has been a 50-50 joint venture between RG Steel and
Dearborn, Mich.-based Severstal North America Inc.since 2011.
RG Steel claims that relations between the two parties
deteriorated almost immediately after the 2011 agreement and
never recovered, according to court documents.
A Severstal spokeswoman declined to comment.