On from January 7 to January 9, 2013, RG Steel Sparrows Point, LLC, Debtor in Possession in the WP Steel Venture LLC Bankruptcy, commenced Chapter 5 preferential transfer recovery litigation with the filing of 287 complaints in the District of Delaware . This plaintiff/debtor in possession has tapped a honey hole of preference claims totaling, to this point, more than $107 million. The plaintiff may also be expecting that the yield on these claims will be higher than usual . . . the ordinary course of business defense appears questionable for many of the preference period payments.
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Debtor and Bankruptcy Case Overview
Lead Bankruptcy Case Name (Case Number): WP Steel Venture LLC (12-11661)
Bankruptcy Court District (Division): District of Delaware
Petition Date: May 31, 2012
Associated Debtors: WP Steel Venture LLC; RG Steel, LLC; Metal Centers LLC; RG Steel Wheeling, LLC; RG Steel Warren, LLC; RG Steel Railroad Holding, LLC; RG Steel Sparrows Point, LLC; RG Steel Wheeling Steel Group, LLC
Debtors' Industry Group: Blast Furnaces and Steel Mills (SIC Code: 3312)
Debtors' Business: The Debtors once comprised the fourth largest flat-rolled steel company in the United States, with capacity to produce 8.2 million tons of steel annually. The Debtors were headquartered in Sparrows Point, Maryland. The Debtors’ operations included three main steel producing operations: RG Steel Wheeling, LLC located in Wheeling West Virginia, RG Steel Warren, LLC located in Warren, Ohio and RG Steel Sparrows Point LLC, located in Sparrows Point, Maryland. The Sparrows Point plant operated as an integrated producer of a range of steel sheet, tin mill and high quality slab products. The Warren plant specialized in manufacturing custom products that are characterized by specialized chemistries, small order sizes, and narrow widths. The Wheeling plant operated primarily as a steel finishing plant.
Primary Industry Groupings of Defendants: Raw Material Suppliers e.g. Iron Ore, Scrap Metal (SIC Code 3312); Transportation and Logistics (SIC Code 4213); Engineering and Service Providers, refractories for iron-making applications
Adversary Proceedings Overview
Plaintiff: RG Steel Sparrows Point, LLC (287 complaints), RG Steel Warren, LLC (148 complaints) and RRG Steel Wheeling, LLC (204 complaints)
Number of Proceedings: 540
When Filed: from January 7 to February 4, 2013
Adversary Proceeding Judge: U.S. Bankruptcy Judge Kevin J. Carey
Plaintiff's Counsel: Primary Counsel: ASK LLP (St. Paul, MN) attorneys Joseph L. Steinfeld, Jr. and Gary D. Underdahl; and Local Counsel: Gellert Scali Busenkell & Brown, LLC (Wilmington, DE) attorneys Ronald S. Gellert and Michael Busenkell
Avoidance Period: The complaint identifies the preference period as "the ninety (90) days before the Petition Date, that is between March 2, 2012, and May 31, 2012".
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