Steel Products

RG Steel Creditors Withdraw Request to Sue Renco Group Founder

Written by Sandy Williams

February 4, 2013

Written by: Sandy Williams

Ira Rennert has been given a reprieve from a potential suit from RG Steel Creditors—at least for now. After seeking court permission to sue the Renco Group founder for deliberately delaying the bankruptcy filing of RG Steel in order to protect his own financial interests, the Official Committee of Unsecured Creditors withdrew their request without explanation on Friday. The request was done “without prejudice,” meaning that it could be brought up again.

Lack of funding may be a possible reason for the withdrawal. The Committee had planned to pay for the lawsuit with money RG Steel seeks to recover from companies paid shortly before the bankruptcy. Cerberus Capital Management asked the court not to approve such funding until Cerberus is repaid in full for loans it extended to RG steel in exchange for partial ownership. A deal the Committee alleges Rennert made with Cerberus in an attempt to avoid potential liability for RG Steel’s underfunded pension plan. (Source: Baltimore Sun)

 

Sandy Williams

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