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Essar Algoma insolvency case approaches finish line

The Toronto judge overseeing Essar Steel Algoma's insolvency proceedings is urging all parties to co-operate as the case winds up.
Photo by Ron Almog, Wikipedia Commons.

Using a curious mash-up of sports metaphors, the judge overseeing the Essar Steel Algoma insolvency case is urging everyone involved to co-operate and get the thing finished.

"The stakeholders do not need a reminder of the critical importance of pushing the ball across the finish line," Justice Frank Newbould said yesterday in a Toronto courtroom.

"Co-operation is highly desirable," the judge added.

SooToday isn't certain what sport involves both balls and finish lines, but Judge Newbould attributed the wording to Massimo Starnino, a lawyer appearing on behalf of United Steelworkers Local 2724.

The judge's remark was made at a hearing called to consider an offer to purchase the Sault steel mill by KPS Capital Partners LP, a Manhattan-based private equity firm.

But KPS withdrew from the bidding last week and all motions scheduled for yesterday were adjourned indefinitely.

Instead, the judge scheduled a new hearing on August 18 "at which time a procedure for going forward is to be presented by the applicants and any other interested stakeholders."

This week, Liberty House, a London-based metals trader and integrated steel producer, was reported to be pursuing deals for the Sault steelmaker, as well as the U.S. Steel mills in Hamilton and Nanticoke.

Term lenders involved in the KPS offer have also expressed interest in making a standalone bid.

Essar Global, the parent company of Essar Steel Algoma, has also indicated an interest in bidding for the Sault mill through a new subsidiary known as Ontario Steel.

Justice Newbould acknowledged Essar Global's intention yesterday and ordered that no more confidential information be provided to a special committee of independent directors of the Essar Steel Algoma board charged with evaluating bids and potential investors.

Essar Steel Algoma's protection under the Companies' Creditors Arrangement Act expires on September 16.