Group Contests Sale of Steel Mill to Nucor

Investors who want to reopen a bankrupt Alabama steel mill filed a lawsuit earlier this week against Nucor, claiming the company helped a company win the bid to acquire the idled Gulf States Steel plant in Gadsden, Ala.

The Gulf States Reorganization Group of Falls Church, Va., accuses Nucor and Casey Equipment, a family owned firm based in Pittsburgh, of conspiring to liquidate the former Gulf States Steel plant in Gadsden, Ala.

That would mean one less competitor for Nucor, which the would-be investors claim "has market power, bordering on monopoly power" in the Southeast.

The lawsuit comes as a bankruptcy court judge reviews his decision to let Casey purchase Gulf States' assets for $6.3 million. The investors accused Nucor of financing Casey's bid.

A spokeswoman for Casey declined comment, saying she had not seen the lawsuit.

According to earlier press reports a bankruptcy court judge approved the acquisition of the idled steel mill by the Casey group, which owns Gadsden Industrial Park LLC, Pittsburgh. The company is expected to disassemble the steel equipment and sell it to companies outside the United States.

The company’s bid for the Gulf States Steel mill was for $6.3 million. The group that was interested in reopening the mill submitted a bid of $7 million, although a bankruptcy trustee rejected the plan.

"There's really no basis for an antitrust suit," said Doug Gunson, a Nucor attorney. He declined to address the charge that Nucor is financing Casey's bid.