Reuters: Bankruptcy News: Creditors seek to slow RG Steel's rushed sale

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Creditors seek to slow RG Steel's rushed sale Jun 20th 2012, 16:39 June 20 | Wed Jun 20, 2012 12:39pm EDT June 20 (Reuters) - Unsecured creditors of bankrupt RG Steel are seeking to slow the company's rushed sale process, which they said will lead to a paltry price and a higher likelihood the company's mills will close, according to court documents. The unsecured creditors committee, which includes the United Steelworkers, suppliers and the Pension Benefit Guaranty Corp, said the July 27 sale deadline was likely to result in the company's assets being surrendered to the existing owner. The could happen because the current owner, Renco Group, has said it is also a secured lender, which the unsecured creditors dispute. RG Steel has said the sale schedule was mandated by its lenders. RG Steel, its lenders and unsecured lenders were urged to resolve the dispute over the sale schedule by Delaware Bankruptcy Judge Kevin Carey, who held an emergency telephone hearing on Wednesday. "We're all accustomed to a quick sale process. Sometimes it's appropriate to slow them down and sometimes there's no need to," he said, adding that he would need to hear evidence before deciding. If the parties cannot resolve the sale schedule, Carey will hear their arguments on Thursday. RG Steel bought its three mills from Russian steelmaker Severstal for $1.2 billion last year. Since then, falling steel prices and rising raw materials costs squeezed margins and forced the company into bankruptcy on May 31. The company's mills include Sparrows Point near Baltimore, Maryland, which is among the largest steel-making plants in the United States. It has annual capacity of 3.9 million tons of sheet, slab and tin products. The committee's attorney, Gregory Horowitz of Kramer Levin Naftalis & Frankel, said during Wednesday's hearing that many interested parties were performing due diligence on RG Steel's assets. Still, the company is putting its mills up for sale in a tough market. Lakshmi Mittal, the chief executive of ArcelorMittal, the world's largest steel producer, said on Tuesday, "There is enough overcapacity in the world," adding that "this is not the time to acquire more growth." The case is In Re: WP Steel Venture LLC, U.S. Bankruptcy Court for the District of Delaware, No. 12-11661. Link this Share this Digg this Email Reprints

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