Metal Recycling Company Keywell Files Chapter 11 Bankruptcy
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Metal Recycling Company Keywell Files for Bankruptcy Debt Relief

October 8, 2013


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Metal recycling giant Keywell LLC is seeking bankruptcy help after a decrease in sales of heavy metals threatened to put the company out of business, according to a recent report The Wall Street Journal.

Sources say Keywell officials blame the company’s financial ills on weak demand from manufacturers for metals like nickel and steel. As manufacturers use less of the raw materials, Keywell has seen a decrease in the amount of metal it collects, reports indicate.

And as the amount of metal flowing into its more than 1,000 scrapyards and industrial plants continues to shrink, the company is having an increasingly difficult time meeting its debts.

Thanks to the decrease in its recycling business, company executives filed for Chapter 11 bankruptcy with the intention of selling the company, according to reports.

In its bankruptcy petition, which was filed in U.S. Bankruptcy Court in Chicago, Keywell claims to have an offer from Croniment Holdings Inc., another recycler of scrap metal that apparently weathered the recession in a more successful fashion than Keywell.

Prior to the recession, Keywell grew exponentially by recycling metals like titanium and stainless steel and selling the repurposed metals to businesses such as steel mills and airplane builders.

But with lower levels of metal being used in American manufacturing, lagging sales, and the constantly fluctuating price of nickel, which is a key ingredient in stainless steel, Keywell simply couldn’t pay its bills any longer.

To give an idea of how difficult the company found its financial condition, Chief Executive Officer J. Mark Lozier said the company had only sold $142 million worth of scrap metal by September of this year, compared to around $330 million worth of metal in a typical year.

So the venerable recycling company, which was founded in Michigan in 1924 before moving to Chicago years later, will attempt to save itself by finding a buyer in bankruptcy court.

The potential buyer will hope that the company is able to shed much of its debt, estimated to be worth roughly $40 million, in bankruptcy court. But it will also be inheriting a recycling company with operations in several U.S. cities, including Atlanta, Pittsburgh, and Charlotte.

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