"At the close of business on the day preceding the (chapter 11 bankruptcy) filing the Debtors had no unrestricted cash."
This information is taken from a preliminary statement on file with the U.S. Bankruptcy Court District of Delaware and is part of the documents involved in the eight filings of bankruptcy with the hope of reorganization made by companies tied to The Renco Group, many through RG Steel interests.
Excerpts from a message authored by the union's negotiating committee which came at the close of the first day of the federal bankruptcy process as an informational update to members included the following information.
"Due to the reduction in customer orders, the company will begin a process to wind down operations and fill remaining customer orders. Layoffs will be implemented as units are idled. The collective bargaining agreement will remain in place and SUB and related benefits will continue through this period.
"They will process and ship as much inventory and product as they can during this period.
"The bank group has provided a Debtor in Possession budget which is designed to provide funding over the 60-day period. The Company is hopeful that they will have found buyers for most if not all of the assets during this 60-day period.
"If at the end of the 60 days they have firm acceptable offers for the assets, we may be able to extend the Debtor in Possession financing.
"The fact is the company's lack of liquidity has been a major obstacle since June of last year and they concluded that a voluntary Chapter 11 filing provides the most effective means of maximizing the value of the business.
"Chapter 11 will provide the opportunity to use the court-supervised process to implement an orderly asset preservation plan and obtain offers to purchase all or certain (parts) of the company's assets.
"Our efforts in maintaining and preserving the assets will be helpful as we work with buyers to complete a sale."
RG Steel's first day of motion hearings in federal bankruptcy court in Wilmington, Delaware included the judge approving a request that the eight individual voluntary bankruptcy petitions filed May 31, each having requested Chapter 11 bankruptcy protection for the purpose of reorganization, be combined into one case filing rather than eight separate ones.
The action to consolidate the individual filings into one case was taken to improve the procedural process, offered court officials.
According to a 32-page document on file with the federal bankruptcy court in Delaware a decision on a number of first day motions simply addressed the specifics of the court accepting requests from attorneys asking to represent a specific party in a legal proceeding before that court.
Thanks to the decision entered Friday on the motion requesting specific relief, debtors will be allowed to file their schedules of assets and liability and statements of financial affairs through and including July 30, 2012, reflecting an extension of 60 days from the original deadline.
"It appears the requested relief motion is in the best interest of these estates, their creditors, and other parties in interest," stated U.S. Bankruptcy Court Judge Kevin J. Carey, reflecting his decision to approve the steel maker's motion.
Collectively RG Steel employs about 4,000 people presently, and has an annual production capacity of more than eight million tons, but its efforts to gain solid footing in the market have met with little more than pure frustration at nearly every turn since RG Steel purchasing the company from Severstal a little more than a year ago.
Loccisano can be reached at kimfromthetl@gmail.com
