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RG Steel creditors asking for time

June 20, 2012
From staff reports , The Herald-Star

STEUBENVILLE - The court-appointed committee representing the interests of bankrupt RG Steel's unsecured creditors is asking for more time.

The committee has asked the court for an additional three weeks to do its job, something both RG Steel and its first-tier lenders seem loathe to do despite the committee's suggestion that a delay would prevent additional financial losses.

RG Steel filed for Chapter 11 bankruptcy protection in May, citing more than $1 billion in liabilities. The company currently has until July 27 to find buyers for its mills in Ohio, West Virginia and Maryland. RG Steel's parent company, the Renco Group, acquired the mills in 2011 from Russia's Severstal for $1.2 billion.

Under U.S. bankruptcy code, the Committee of Unsecured Creditors is empowered to consult with the Chapter 11 trustee, if one has been appointed, or the debtor-in-possession concerning the administration of the case; investigate all aspects of the debtor's business, including the company's assets and liabilities; and review issues arising in the course of the bankruptcy and perform other services deemed to be in the interest of creditors.

The $50 million in interim financing RG Steel was able to secure from its secured lenders - who are owed roughly $450 million and have liens on virtually all of the company's assets - requires the plants to be sold by July 27.

Wheeling-based Herman Strauss Inc. and River Rail Development have tendered a $15 million bid for a 111-acre parcel in Steubenville. Esmark Chairman Jim Bouchard, who engineered a hostile reverse takeover of what was then Wheeling-Pittsburgh Steel Corp. in 2007 only to be forced to sell it the following year to Severstal, has voiced interest in acquiring part of Wheeling Corrugated, though not its Ohio Valley plants. Bouchard has, however, voiced interest in the former Wheeling-Pitt office building in Wheeling.

Local steel leaders have confirmed representatives of several companies have toured area operations, though no one is saying what companies are interested, how serious that interest is and what their plans would be for the mills.

 
 

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