July 15, 2005
Bankruptcy Judge Approves Havens Steel Plant Sale
Jul. 16--KANSAS CITY, Mo. -- A federal bankruptcy judge on Friday approved the sale of Havens Steel Co.'s plant in Ottawa, Kan., setting the stage for the liquidation of the Kansas City steel fabricator.
Schuff Steel Co. of Phoenix, which has been running the Ottawa plant since the beginning of the month, acquired the facility for $4.5 million, according to a court order signed by U.S. Bankruptcy Judge Jerry Venters.The proceeds will go to St. Paul Fire and Marine Insurance Co., the bonding firm that has financed Havens since it filed for bankruptcy in March 2004. St. Paul Fire and Marine also held the lien on the Ottawa plant.
Schuff Steel emerged last month as the leading candidate to buy Havens' Ottawa plant, which had been the company's only operational facility for many months. Havens had been leasing the Ottawa facility to Schuff while the bankruptcy court gave other companies an opportunity to make a higher offer, but no new bidders emerged, according to bankruptcy documents.
Schuff Steel kept the work force at the Ottawa plant intact and employs more than 100 people, said Scott Sherman, the company's vice president and general counsel.
Schuff is continuing the fabrication work on a project at the Phoenix Convention Center that previously was done by Havens Steel at the Ottawa plant.
"We've sent several other projects there as well," Sherman said. "This is good for everyone and the Ottawa area. We're looking forward to building a successful relationship there."
With the sale of the plant, the company has only a few administrative employees, and a liquidation of the company appears likely, said Jonathan Margolies, the company's bankruptcy attorney. How that process occurs will be up to St. Paul Fire and Marine, he said.
"Now that we've sold our operational plant, it's quite obvious we're not going to reorganize this company," Margolies said.
Havens' current debtor-in-possession financing arrangement with St. Paul Fire and Marine expires Sept. 9, said Margolies of McDowell, Rice, Smith & Buchanan.
Havens Steel filed for bankruptcy protection from creditors in March 2004 after it was crippled by soaring steel prices. When it filed, the company reported it had about $38.8 million in assets and about $40 million in liabilities. In addition to about $17.2 million in secured debts owed to Commerce Bank and St. Paul Fire and Marine at the time, the company listed just over $22.9 million in unsecured debt.
Havens, which at one time employed as many as 700 people, was founded in 1919 by engineer Harry Havens. The company was involved in big commercial projects all over the country during its recent history.
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