RG Steel agrees to reduction of $44.7 million claim against subsidiary

By Kali Hays

New York, March 3 – RG Steel, LLC is seeking approval of a settlement between its subsidiary RG Steel Sparrows Point, LLC and creditor Air Products and Chemicals Inc. resolving a $44.7 million claim, according to a March 3 motion with the U.S. Bankruptcy Court for the District of Delaware.

Prior to RG’s bankruptcy filing, Air Products provided the company and its subsidiaries with industrial gases and other services.

In September 2012, Air Products filed a general unsecured claim totaling $44.66 million based on this business relationship and a separate agreement with Sparrows Point allowing Air Products “certain releases” upon exiting bankruptcy. RG disputed the validity and amount of the claim and negotiations have been ongoing since late-2012.

With approval of the settlement, Air Products will have an allowed general unsecured claim against Sparrows Point totaling $29.25 million and the parties will release any and all claims against one another.

The company asked that a hearing to consider the agreement be set for March 18.

RG Steel, a Sparrows Point, Md., flat-rolled steel processor, filed for bankruptcy on May 31, 2012. Its Chapter 11 case number is 12-11661.

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