Trico Steel Co.'s unsecured creditors' committee and a number of other interested parties have filed objections to terms of the company's proposed $120 million sale of its assets to a wholly owned subsidiary of Nucor Corp.
Nucor announced plans to acquire the closed steel mini-mill late last year. The mill, located in Decatur, Ala., has struggled with its equipment since it began operation several years ago.
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The U.S. Bankruptcy Court in Wilmington, Del., will consider the proposed sale at a hearing January 24th.
The committee "vigorously supports the opportunity" for Trico Steel's assets to be sold to Nucor Steel Alabama LLC or another third party and for the company's mill to be reopened, according to an objection Dow Jones Newswires obtained, but it opposes the distribution of sale proceeds outside the framework of a liquidation plan.
Trico Steel has insisted that the sale of its assets is essential to completing a liquidation plan, but the committee argued that it's unclear whether the company intends to distribute the proceeds under a plan.
Also, the committee is still investigating the extent, validity, priority, and enforceability of the alleged liens of Trico Steel's secured creditors, the objection said. The filing contended that until this process is completed, no sale proceeds should be distributed to the secured creditors.
The committee requested that Trico Steel clarify its expected allocation of sale proceeds. The committee said Trico Steel should retain the proceeds until the framework of a liquidation plan has been formulated and agreed to by the company, committee and secured creditors.
Trico Steel currently has the exclusive right to file a Chapter 11 plan through March 22.
Secured creditor Martin Plan Services, a division of MSCO Inc., filed another objection, claiming Trico Steel's proposed sale order fails to place a portion of sale proceeds in an escrow account pending a resolution of that creditor's alleged secured claim.
The industrial systems division of General Electric Co. opposes terms of the sale because the property on which it holds a lien would be transferred "free and clear of all liens," its objection said.
In a separate filing, creditor Delta Services Inc. asserted that it also holds a lien on the Decatur property and has joined General Electric's objection.
Trico Steel is 50 percent owned by LTV Corp. The remaining 50 percent is evenly owned by Corus Group of London and Sumitomo Metal Industries Ltd. of Tokyo. Dow Jones