Scholz sued Indalex for USD 6.5 million for breach of contract

Posted by anzhuo on December 8th, 2015


    Platts reported that Scholz Aluminium has sued US aluminum extruder Indalex for USD 6.5 million, claiming breach of contract and non payment. However, given that the lawsuit was filed on the same day as Indalex's Chapter 11 bankruptcy filing on March 20th, the lawsuit has been delayed.The lawyer said that "Pursuant to the Bankruptcy Act it will be stayed, pending further orders of the bankruptcy court."

    A clerk with the US District Court for the Northern District of Illinois, Eastern Division, said that there has been no action on the case since the March 20th 2009 filing.In its bankruptcy filing in Delaware, Indalex listed Scholz as one of the top 30 unsecured creditors, with a debt of USD 2.5 million.Scholz Aluminium said in the lawsuit that "The action arises from Indalex's breaches of multiple agreements between the parties for the supply of aluminum billet to Indalex by Scholz."

    According to court documents, the business relationship between Scholz and Indalex began in late 2007, when Scholz became a supplier of aluminum billet to Indalex. The default on payment began with November 2008 billet orders and continuing until January 2009.According to the suit, "Indalex promised to make a payment promptly, but did not do so. Despite Scholz's repeated demands for payment, Indalex did not pay for the aluminum it had taken, claiming that difficult market conditions are causing cash flow issues which Indalex continues to work through."

    In December, Indalex informed Scholz that it had been in discussions with others suppliers and that it was unlikely that Indalex would make any purchases from Scholz in 2009. As a result, Scholz said it suffered a loss of no less than USD 1.2 million for its hedge position relating to Indalex's cancellation of a billet order in September.

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