The owner of the Sparrows Point steel mill site in Baltimore has filed for Chapter 11 bankruptcy protection in Wilmington.
CityBizList.com had previously reported that the company was looking for options, such as finding a buyer, after announcing plans to idle operations. Gov. Martin O’Malley issued a statement noting that the State of Maryland had been working on issues related to the steel complex, but added that industry troubles hampered a turnaround.
RG Steel was formed in March, 2011 following the purchase of three steel facilities located in Sparrows Point, Md.: Wheeling, W.Va. and Warren, Ohio. John Goodwin, CEO of RG Steel stated: “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.”
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.
The Sparrows Point site, which has struggled even during good times for the industry, has already laid off workers.
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.
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.
Additional information regarding the Company’s bankruptcy case can be found at http://www.kccllc.net/RGSteel.