Judge Blocks SDI Purchase of Qualitech

The sale of the Qualitech steel mill in Pittsboro, Ind., to Steel Dynamics Inc. (SDI), Butler, Ind., has been temporarily blocked by a judge in the Hoosier State.

Acccording to the Associated Press, Superior Court Judge Robert W. Freese issued the order following a three-hour hearing on Tuesday.

Nucor Corp., Charlotte, N.C., requested the sale be halted and claimed it is a victim of fraud and breach of contract because it had signed a deal in January to buy the idled Qualitech mill.

On July 29, Steel Dynamics announced its offer of $45 million in cash for Qualitech, topping Nucor’s earlier offer of $37 million. At that time, Nucor CEO Dan DiMicco commented, “We are very surprised by this announcement. Nucor had been proceeding in good faith to complete its due diligence, obtain necessary approvals and resolve all other outstanding matters in order to close this transaction within the next few days. Nucor is investigating the implications of this announcement and intends to pursue all of its options, including legal.”

An attorney for Nucor told AP on Tuesday the company had been trying to complete the deal, but that Qualitech officials were stalling.

Steel Dynamics says the exclusive sales agreement that Nucor had with Qualitech has now expired, which left an opening for SDI to start negotiations.

It is uncertain whether Qualitech’s officers will be found to have signed two concurrent agreements to sell the mill, which was idled in 2000 and has been up for sale since early 2001.