Suit could impact Ormet sale
WHEELING – American Electric Power is suing Ormet Corp., claiming the aluminum maker remains $8.9 million behind on its electricity bills.
The stuit could jeopardize the sale of Ormet to Minnesota-based Wayzata Investment Partners for $221 million because the deal is contingent upon a power agreement with the Public Utilities Commission of Ohio. Ormet filed for bankruptcy and restructuring in February.
According to a July 8 stuit filed in U.S. District Bankruptcy Court in Ohio, AEP subsidiary Ohio Power Co. is seeking to delay a new Ormet power agreement, largely because Ormet still owes $8.9 million.
Ormet Chief Executive Officer Mike Tanchuk, upon the company’s June 4 announcement of the deal with Wayzata, said the company needed “suitable relief to the current power arrangement authorized by the PUCO” to complete the sale.
Last summer, Ormet issued a Worker Adjustment and Retraining Notification Act notice regarding the possibility of laying off 998 employees, including 837 union workers and 161 management workers. The WARN notice expired Dec. 31. At the time, Tanchuk said Ormet’s American Electric Power bills were going to increase by about $20 million per year.
By a vote of 417-130, United Steelworkers Local 5724 at Ormet recently ratified a new contract with Wayzata. The steelworkers sent a letter supporting a new electricity agreement to the utilities commission earlier this month.
“With a work force of 1,000 employees and an indirect link to thousands more in surrounding communities, I feel it is imperative that Ormet be allowed to modify its existing power agreement, allowing it to emerge from bankruptcy under new ownership,” the letter states.
“Ormet is by far the largest employer in rural Monroe County, providing a strong tax base for the county school systems. To lose these jobs and taxes would be devastating to our area.”