Local investors for Alton Steel Inc. stand poised to buy and reopen the Laclede Steel plant, as Laclede’s attorneys are expected today to file paperwork asking the sale be approved.
Alton Steel, led by Melvin Cook, a former manager at Laclede, and officials for Laclede have worked out an agreement with the U.S. Environmental Protection Agency and Illinois EPA for site clean-up. The U.S. EPA is expected to announce the agreement today. Alton Steel also has reached a contract agreement with United Steel Workers of America Local 3643.
Bryan Cave LLC, the law firm that represents Laclede in its bankruptcy proceedings, is expected today to file paperwork asking Judge Barry Schermer of the U.S. Bankruptcy Court in St. Louis to approve the sale. Laclede declared bankruptcy when it closed in July 2001, putting 650 people out of work.
Once the paperwork is filed, there will be a 30-day period in which someone might offer to buy the plant.
"We have to go through the process within the bankruptcy system," said Raymond Stillwell, the attorney for Alton Steel and one of the six investors behind the group. "That motion to approve the sale lays out the procedure. We know of no other parties that can match our deal, and it’s not anticipated."
Stillwell said Laclede Steel’s creditors, who hope to get some return from the sale of Laclede’s assets, would not be likely to object.
"If we don’t buy it on the terms that we are (buying it), then the bankruptcy estate will continue to battle with the environmental claims," he said. "The litigation costs alone over time could eat up most of the bankruptcy estate. So, this is really a good deal for the unsecured creditors, because they’re getting more than they would if they spent several years litigating the claims, which is what everybody thinks would happen."
The plant will consist of a melt shop to turn scrap metal into semi-finished steel and a 14-inch bar mill to produce high-quality steel.
"Our marketing strategy is to start out with a low level of employees, and we have to get certification and all that," Cook said. "There are customers that will take products that do not have to be certified. We’ve gotten very good response from customers."
The Alton Steel group announced in February 2002 that it wanted to buy the Laclede plant and use it to manufacture steel bars. Through bankruptcy liquidation, Laclede already has sold off all of its property, with the exception of the Alton steel mill. The Telegraph.com