Verso scrap metal purchaser files lawsuit, claims $6.8 million owed

By Caroline Salls

Pittsburgh, April 19 – Verso Corp. scrap metal buyer American Iron & Metal LP filed a lawsuit Tuesday against the company, alleging that Verso still owes it more than $6.8 million under a $7 million purchase agreement, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

American Iron said it prepaid $7 million to Verso under the agreement, but Verso has delivered less than $200,000 of the contracted metal.

According to the lawsuit, Verso is seeking court approval “to shed the defendants’ liabilities and obligations” through a motion to reject the purchase agreement.

Through its complaint, American Iron said it is asking the court to rule that the scrap metal be held in a trust for the plaintiff’s benefit or rule that it holds an equitable lien in the property.

American Iron is also seeking a secured claim in Verso’s bankruptcy case in the amount of the prepayment balance.

Verso, a Memphis-based producer of printing and specialty papers and pulp, filed for bankruptcy on Jan. 26. The Chapter 11 case number is 16-10163.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.