Auction settles foundry assets on industrial equipment asset sale specialist
- Top bid $29.7 million
- Idle since May
Columbus Steel Casting operated for more than a century, supplying castings for freight and passenger railcars, locomotives, and mining and construction equipment, until it ceased production on May 9. It had employed about 800 workers.
Columbus Steel Castings has been sold at auction, fueling the expectation that the now-idle operation will not return to production but will have its assets sold piecemeal. Reich Brothers Inc., a specialist in commercial and industrial equipment asset sales, earned the purchase with a bid of $29.7 million.
Constellation Enterprises LLC, the holding company for the Ohio steel foundry, named Reich Brothers’ bid as the winner, and published reports indicate it was $1.6 million higher than the next highest bid.
Columbus Castings had about 800 employees as recently as a few months ago. It has been idle since shortly before the May bankruptcy filing
Constellation filed for creditor protection in May under Chapter 11 of the U.S. bankruptcy code, intending then to restructure its debt obligations. According to the filing, Constellation and its four operating subsidiaries (Columbus Steel Castings, Commercial Metal Forming, Jorgensen Forge Corporation, and Zero Manufacturing) have total debts amount to $238 million.
While the other three companies continued to operate at the time of the filing, the foundry was idled and its 800 employees were laid off.
Constellation believed at the time of its filing that it had a buyer ready to acquire Columbus Steel, presumably to resume operating the plant, but that agreement failed to develop and the asset auction was scheduled. One unconfirmed report indicated that the second-place bidder in the auction was Columbus Operations LLC, a company tied to Stellex Capital Management, which has been understood as the investor that Constellation hoped in May would acquire and restart the foundry.
The problems forcing the bankruptcy were traced to a 2015 furnace outage at Columbus Steel Castings, which it stated cost roughly $15 million to repair, disrupted production for six weeks, and halted delivery of steel castings to its customers.
Columbus Steel Castings was described often as the largest U.S. steel foundry operating from a single location. It supplied castings for freight and passenger railcars, locomotives, and mining and construction equipment for more than a century.