CHICAGO Ormet Corp. has been granted permission by a federal bankruptcy court judge to scale back production at its aluminum smelter in Hannibal, Ohio, and its alumina refinery in Burnside, La., if necessary.
The bankrupt Hannibal, Ohio-based aluminum producer is permitted but not directed to take actions it might think essential to preserve the value of the estate, including production cuts at Hannibal and Burnside, bankruptcy judge Mary Walrath wrote in an order dated July 23.
The order came in response to an emergency motion filed by Ormet seeking approval for such cuts.
Ormet filed for Chapter 11 bankruptcy protection in February citing high legacy and power costs and low aluminum prices (amm.com, Feb. 26
). The company was sold last month to Smelter Acquisition LLC, a subsidiary of Wayzata, Minn.-based Wayzata Investment Partners (amm.com, June 4
But a power dispute has seen Ormet contending that the sale could be in jeopardy and threatening to cut production or liquidate pending a cash crunch the company has said could come as soon as July 31 (amm.com, July 15