Court will hear Esmark’s request
YORKVILLE – A request made recently by Esmark Steel Group asking a judge to compel RG Steel to close on what is essentially half the deal struck through the recent court approved auction process RG Steel has been employing in its Chapter 11 bankruptcy reorganization. It will get the full attention of the court during a hearing set for the afternoon of Friday, Sept. 7 before The Honorable Judge Kevin J. Casey.
It is anticipated both sides will call witnesses and present vigorous testimony at that hearing as their respective opinions about the track the negotiated deal should now be taking are apparently quite different.
According to American Metal Market reports of the basic events of Friday’s court proceedings, RG Steel officials had little to say on the matter other than it would continue to hold its position of disagreeing with Esmark about the steadily declining value of the Ohio Coatings Company facility and the urgency of closing on that portion of the negotiated bid as the time of year for tin negotiations is rapidly approaching.
RG Steel had agreed to sell its half ownership in OCC to Esmark Steel Group LLC for $1.5 million in cash, but when Esmark wired payment to complete the expected transaction the monies were not accepted and were returned.
“RG disputes the notion that the value of Ohio Coatings is eroding. It disputes the notion that Esmark is entitled to close the transaction. This will be opposed,” was the response from RG Steel counsel on aspects of the motion to compel filed by Esmark earlier in the week in an effort to elevate the developing issue so it can be resolved as quickly as is possible.
“We appreciate the court’s prompt attention to our motion and look forward to the hearing and concluding this matter as quickly as possible,” were the words shared by Esmark Founder and Chairman James P. Bouchard said in an e-mail sent to AMM.reporter Chris Prentice following Friday’s hearing in Wilmington.
From the outset of negotiations at the time of the auctions, Esmark stipulated it wanted to buy both the Yorkville mill on Public Road and the 50 percent interest in OCC held by RG.
That plan’s structure called for simultaneous transactions.
The plan has had to shift in the wake of the 11th hour revelation by Ohio EPA representatives to Esmark that un-addressed environmental violations are believed to exist on site, with some having gone unresolved for several years time despite RG having been made aware of the conditions.
While exactly what progress has been made on that matter’s status is not known, several state and national entities are known to be working cooperatively to assess the site and begin structuring what will likely be an agreement stipulating what issues do exist and initial remediation recommendations and possible funding sources – so as to not put Esmark’s business plan for the Yorkville mill and OCC in jeopardy.
Loccisano can be reached at email@example.com