RG Steel set to receive $1.4 million in proposed settlement agreement

By Kali Hays

New York, July 7 – RG Steel, LLC is seeking court approval settlement agreement with its former subsidiary Ohio Coatings Co. and Desch Antriebstechnik GMBH Co. KG that would afford the company a $1.4 million payment, according to a Monday motion with the U.S. Bankruptcy Court for the District of Delaware.

The agreement is related to litigation that began in 1999 with Ohio Coatings seeking damages caused by an allegedly defective piece of equipment supplied by Desch, but installed by a third party.

Under the terms of the agreement, Desch will make a single $1.4 million payment to RG Steel and a single payment to Ohio Coatings of $718,822 within 75 days of an order approving the settlement and in turn, the companies will release all claims against one another and all litigation will be dismissed, according to the motion.

The company said that the settlement allows for the avoidance of “additional time, expense and uncertainty of litigating the case to judgment.”

A hearing date of July 15 was requested.

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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