RG Steel Files for Bankruptcy Protection
The struggling steel company had previously announced plans to idle its Sparrows Point plant and two others beginning June 4.
RG Steel on Thursday morning released the following statement:
RG Steel, LLC and its wholly-owned subsidiaries (the “Company”) announced today that they have filed petitions under Chapter 11 of the United States
Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware.
RG Steel was formed in March, 2011 following the purchase of three steel facilities located in Sparrows Point, MD, Wheeling, WV and Warren, OH.
John Goodwin, CEO of RG Steel commented, “Despite the Company’s
aggressive cost reduction efforts, significant improvements in its cost structure, and substantial investment capital, the Company has been unable to overcome the impact of the continued deterioration of the market and the inability of the industry to sustain a meaningful recovery.”
After a thorough analysis of the Company’s liquidity position and extensive consideration of available alternatives, the Company after consultation with its advisors, concluded that a voluntary Chapter 11 filing provided the most prudent and effective means of maximizing the value of our core business.
“By voluntarily filing for Chapter 11, we will have the opportunity to use the court-supervised process to implement an orderly asset preservation plan and explore other options, including soliciting offers to purchase all or certain of the Company’s assets. We have already begun a sales process aimed at
maximizing value for all stakeholders and preserving the jobs created when RG Steel acquired these facilities,” Goodwin stated.
In conjunction with the filing, the Company has filed a number of first day motions that will allow it to transition into a bankruptcy process in an orderly manner.
Those motions include requests to make wage and salary payments and continue other employee-related programs.
Notably, any joint venture in which the Company has an interest will continue to conduct business as usual and will not be subject to the Company’s bankruptcy case.
The Company has retained Willkie Farr & Gallagher LLP as its legal advisor, Conway MacKenzie, Inc. as its financial advisor and The Seaport Group as its lead investment banker.