WARREN - A slag disposal company that has been doing work at a now-idled Warren steel mill for several years has asked a bankruptcy judge to intervene in a dispute with the mill's new owners.
Phoenix Services LLC of Pennsylvania has filed a complaint asking a judge to force the mill's new owners, BDM Warren Steel Holdings LLC, to allow the company to regain access to steel slag and equipment at the site. The motion was filed last week as part of RG Steel's Chapter 11 bankruptcy case in Delaware.
A letter from one of the mill's new owners, Charles J. Betters, filed with the motion maintains that he believes the mobile equipment, tools and processing plant at the site are property of Phoenix; however the slag at the site is now property of BDM.
In the Nov. 13 letter to Phoenix, Betters proposed an option for Phoenix to pay BDM $1.71 million for the purchase of 183,000 tons of unprocessed slag and about 4,000 tons of scrap. Betters gave Phoenix four days to respond or remove his equipment within two weeks.
In the motion, Phoenix called the offer "outside industry norms and unacceptable to Phoenix."
''Further, BDM Warren's demand that Phoenix vacate the Warren site within two weeks is unreasonable in light of the Phoenix's good faith negotiations, and given that Betters is well aware that it will take several months for Phoenix to remove the Phoenix-Warren assets from the Warren site,'' the motion argued.
Phoenix accused Betters of attempting to "strong-arm Phoenix into an agreement that heavily favors Betters if Phoenix should refuse Betters' outrageous terms.''
Under the agreement for blast furnace slag services Phoenix signed Sept. 30, 2010, with previous mill owner Severstal, Phoenix paid Severstal 30 percent royalties from all the net revenue Phoenix earned from the sale of the processed blast furnace slag.
Betters, however, maintains that ''Phoenix and its predecessors never had title to the slag that was mined at the facility,'' but rather ''had certain processing rights'' and owned specific equipment.
''The Bankruptcy Court terminated the Phoenix agreement," Betters said in a letter. He added he has no obligation to offer a contract, but did offer one in an attempt to address the matter.
Betters has not yet filed a court response to the motion, and the judge has not ruled on the matter.