Lee Steel Corporation and Affiliates (“Lee Steel” or the “Company”) is a top-tier steel service center that provides a full range of flat rolled steel; including hot rolled steel, cold rolled steel, and exposed coated products. Lee Steel has the capability to supply slit coils or precision blanks which are all processed in-house utilizing the most state-of-the-art equipment available. With over 60 years of experience, Lee Steel is a leader in innovation and a reliable source for quality steel.

Situation Summary: Lee Steel had historically been a steadily growing, profitable company. However, multiple factors, many of which were out of the Company’s control, caused the Company to experience significant liquidity constraints, ultimately leading to the Company’s chapter 11 bankruptcy filing. These included the collapse in steel prices just after the Company’s significant investment in its Romulus, Michigan facility, along with unanticipated cost overruns for the Company’s Eco-Pickled Surface (“EPS”) Coil Line located at the Romulus facility. 

Our Approach: The Company retained Huron Transaction Advisory (“HTA”) to sell all, or substantially all, of Lee Steel’s assets through a chapter 11 section 363 sale process in accordance with the United States Bankruptcy Code. This was based upon Huron’s experience providing investment banking and financial advisory services for financially and operationally distressed companies, as well as our deep industry expertise. Working closely with colleagues from Huron’s restructuring and turnaround practice, the investment banking team reviewed various strategic alternatives for the sale of the Company’s assets. Over the course of 13 weeks, Huron’s investment banking team developed a comprehensive sale process, including reaching out to 143 potential purchasers, consisting of 53 strategic buyers, 65 financial buyers, five real estate buyers, and 20 liquidators. 

Results & Benefits: On an expedited timeline, HTA solicited multiple stalking horse bid offers for various categories of assets which led to significant interest at auction. HTA received two stalking horse bids and there were a total of seven parties that participated in the auction. In September 2015, Lee Steel successfully completed the sale of its assets to Union Partners I, LLC, as well as Hilco Industrial LLC and Hilco Real Estate LLC. The auction resulted in a sale price of approximately $24 million for Lee Steel’s Wyoming assets to Union Partners I, LLC, a sale price of approximately $16 million for Lee Steel’s Romulus assets to Hilco Industrial, LLC and Hilco Real Estate, LLC, for a total of approximately $40 million. Through a highly comprehensive and competitive process, HTA was able to maximize value for the Company and its constituents. At the sale hearing, the Honorable Judge Marci B. McIvor commented that out of all the cases she has handled since being on the bench, this was the most active she had seen.