AL Tech Specialty Steel Corp., Dunkirk's largest employer, Wednesday filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
AL Tech will maintain business as usual while negotiating a reorganization plan with its creditors.
The company employs 603 hourly and salaried workers in Dunkirk and an additional 247 in Watervliet, near Albany, and has annual sales in the $100 million range.
AL Tech's assets total $90.36 million, while its liabilities total $250.84 million, according to documents filed Wednesday in bankruptcy court in Buffalo.
In conjunction with the Chapter 11 filing, the company also filed an injunction to prevent its South Korean parent, Sammi Steel South Korea, and its Canadian sibling, Sammi Atlas (Sammi Specialty Steel) in Welland, Ont., from what it called "interfering with the company's operation and its efforts to reorganize."
Specifically, the injunction is against AL Tech's one-man board, K.K. Paick, and Sammi Steel America, which is owned by Sammi Steel South Korea.
"Today's actions were not surprising in light of the March 1997 bankruptcy filings of our parent and affiliate Sammi Steel companies in South Korea and Canada and the serious economic situation currently taking place in South Korea," said Kevin Sanvidge, AL Tech's corporate director of administration.
Once Sammi filed for bankruptcy
nine months ago, all capital infusion to AL Tech ceased, Sanvidge said. While he would not speculate on whether or not Sammi might try selling AL Tech's assets to satisfy its creditors, the injunction would seem to indicate the Western New York firm is being proactive in preventing any such sale.
"We wanted to make sure that our creditors were taken care of," Sanvidge said. "We believe the company has an excellent prospect of working through this process quickly."
AL Tech traces its roots to the former Atlas Crucible Steel Co. in Dunkirk, founded in 1907, and the Ludlum Steel and Spring Co. in Watervliet. The two firms merged in 1929.
In 1938, the company joined forces with Allegheny Steel Co. of Brackenridge, Pa., near Pittsburgh, to form Allegheny Ludlum Steel Corp.
AL Tech Specialty Steel was formed in 1976 when a management group purchased Allegheny Ludlum's Bar Products Division. Sammi Steel purchased AL Tech in 1989.
Earlier this year, soon after Sammi Steel filed Chapter 11, another South Korean steelmaker, Pohang City Iron & Steel Co., held discussions to acquire AL Tech.
But Pohang officials could not come to any agreement, saying that, given Sammi's bankruptcy, it was unsure with whom it would be dealing.