Rouge Industries’s reorganization plan receives objections
According to market reports, Rouge Industries Inc.' reorganization plan received response from some enterprises which have already filed their objections to the US Bankruptcy Court with the claim that the amount Rouge Ind. is indebted to them is not taken into consideration.
US Steel (USS) which is among these enterprises, reported that on October 20, which was two days before Rouge Ind.'s announcement that it filed for bankruptcy protection and received an offer from Russian
Severstal, it offered Rouge Ind. to buy the company. Besides USS stated that 50% of Double Eagle Steel Coating Co., the joint venture between USS and Rouge Ind., has to be excluded in this sale as being in business relation with
Severstal is out of question for them.
Additionally, a division of Justice Department the US Trustee's Office opposed to the plan as well stating that there is no definitive sale agreement between Rouge and
Severstal, enabling the Russian steelmaker to back out of the sale in any time. It is also reported that
Severstal has not disclosed terms of its offer.
The sale is expected to initiate at the hearing to be held on November 24 and Rouge Ind. desires to complete the sale on December 12. In any case, a new labor contract has to be signed with the United Auto Workers union, representing 73% of the total 2600 workforce of Rouge Ind.