Reunion receives payment demands on 13% notes, promissory note; checking recapitalization options

By Caroline Salls

Pittsburgh, Feb. 8 - Reunion Industries, Inc. received a notice of default from the trustee of its 13% senior notes citing non-payment and demanding immediate payment of all of the $22 million in principal and $11.3 million of interest due on the notes, according to an 8-K filing with the Securities and Exchange Commission.

The notes have matured, according to the filing.

In addition, the company received a letter from Steel Partners II, LP, the holder of a $3.5 million promissory note that was due on Dec. 5, demanding payment of all principal and interest due on that note.

Under the terms of an intercreditor agreement, the indenture trustee and Steel cannot exercise their rights as secured parties with respect to their loans to the company until 180 days after filing the default notices.

As a result, the standstill period for these notices began on Feb. 2, according to the filing.

Reunion said it is continuing to investigate other recapitalization scenarios and/or the possible sale of assets to provide the liquidity to pay its debt obligations.

Reunion is a Pittsburgh-based manufacturer of metal and plastic products.

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