Trending
Calendar
 
CP on Facebook

 

CP on Twitter
Print Email

Mobtown Beat

Oh, Scrap!

Sparrows Point auctioned to liquidators—with ties to RG Steel

Bankrupt RG Steel’s Sparrows Point steel mill complex was auctioned to equipment liquidator Hilco Industrial, on Aug. 7 for $72 million. The Baltimore Brew found financial ties between Cerberus Capital Management, the “white knight” venture capital fund that gained a 24.5 percent stake in RG Steel last year by lending the company $220 million, and Hilco’s parent company, Hilco Trading. Cerberus and Goldman Sachs, together, took a 33-percent stake in that company in 2006.

A hearing to approve the sale is scheduled for Aug. 15. Bankruptcy rules forbid insiders in a bankrupt company from bidding on the company’s assets, but because Cerberus and Hilco are private companies, it is was unclear as of press time if they are still connected.

The low price for the giant steel mill was a blow to the 2000 or so laid-off workers as well as the plant’s creditors. The plant was valued above $1 billion and holds inventory worth more than $200 million, according to court records. The bid winner must wait at least six months before dismantling the plant in order to give the union and other stakeholders a chance to find another buyer who would keep the plant running.

Meanwhile, Baltimore County residents filed a lawsuit against RG and a nearby cement plant, claiming that pollution from the companies contaminated their property and damaged their health. Their suit follows a legal claim by the Chesapeake Bay Foundation and other environmental groups seeking to force RG (or its successor) to step up water pollution control around the plant.

  • General Assembly 2014 Winners and Losers Taking stock of the session that just ended | 4/16/2014
  • Show us your licensing Following controversial case, new policy requires liquor board to make more decisions public | 4/16/2014
  • Who Do We Love? Maryland gives tax breaks to lots of businesses, not just Kevin Spacey’s | 4/9/2014
  • Sale On Baltimore is about to sell off its public housing. Someone is going to make money—and that’s the plan. | 4/2/2014
  • Crews In For a Bruisin’? Local film crew vets question their future as House of Cards and Annapolis battle over tax credits | 4/2/2014
We welcome user discussion on our site, under the following guidelines:

To comment you must first create a profile and sign-in with a verified DISQUS account or social network ID. Sign up here.

Comments in violation of the rules will be denied, and repeat violators will be banned. Please help police the community by flagging offensive comments for our moderators to review. By posting a comment, you agree to our full terms and conditions. Click here to read terms and conditions.
comments powered by Disqus