Steel recycling company Bayou Steel has filed for protection under Chapter 11 of the Bankruptcy Code. The move comes a day after announcing it would be laying off 376 employees and shutting down its LaPlace-based steel mill.
According to documents filed in Delaware bankruptcy court Tuesday, the steel recycling company owes between $50 and $100 million to other businesses. Among the 30 entities owed the most, seven are based in Louisiana.
That includes $765,622 owed to the recycling company Louisiana Scrap Metal and $647,339 owed to industrial construction and maintenance company River Parish Contractors.
In a statement, Bayou Steel said, “...this unfortunate situation was created by a severe lack in liquidity at the Company, which resulted in a default with its senior secured lender, and created a situation where the Company could no longer purchase raw materials.”
Governor John Bel Edwards speculated Bayou Steel’s closure had to do with President Trump’s tariffs on imported steel, but Chris Ward, a lawyer representing the company, said “tariffs had no role to play with respect to the bankruptcy filing.”
The Louisiana Workforce Commission says it is providing Bayou Steel workers with information about other employment and training opportunities.
