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RG Steel creditors refile suit seeking $238M

Keywords: Tags  RG Steel, bankruptcy, creditors, lawsuit, Ira Rennert, Renco Group, Vincent J. Goodwin, Cerberus Capital Management Catherine Ngai


NEW YORK — The creditors of bankrupt steelmaker RG Steel LLC have renewed their quest to collect more than $238 million from RG parent Renco Group Inc.’s chairman, Ira Rennert, and have added the name of former RG chief executive Vincent J. Goodwin as a defendant.

The creditors’ filing asks the court for permission "to commence, prosecute, and settle claims and causes of action against Rennert and Goodwin" for breaching their fiduciary duties to the creditors, as well as against Rennert and Renco "for aiding and abetting Goodwin’s breaches of his fiduciary duties," according to a Feb. 22 filing in U.S. Bankruptcy Court in Delaware.

The creditors claim Rennert and Goodwin delayed the steelmaker’s bankruptcy in order to allow Renco to transfer a portion of its equity interest to Cerberus Capital Management LP in an effort to avoid meeting pension plan obligations, according to the filing.

"In lieu of filing for bankruptcy ... Rennert and Goodwin caused the debtors to enter into the Cerberus transaction and incur massive amounts of secured putative indebtedness," according to court documents. "As further described in the complaint, the Cerberus transaction was designed to benefit Rennert and Renco and was not in the best interests of the debtors."

A Renco spokesman called the claims "frivolous and without merit."

Earlier this month, the creditors withdrew their previous challenge seeking $238 million from Renco and Rennert (amm.com, Feb. 4). The withdrawal was filed without prejudice, allowing them to refile at any time.


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