Bayou Steel's laid-off workers sue owners

A group of former Bayou Steel employees are suing the former owners of the LaPlace plant, claiming they deliberately waived their employment contract without warning before closing the plant last year.
Their lawsuit alleges that Black Diamond and owner Stephen Deckoff negotiated a new employment contract with unscrupulous steelworkers, knowing that prior to signing the contract at the end of September, he planned to close the plant in just a few days for a while.

A 40-year-old steel mill specializing in scrap metal recycling was forced to file for Chapter 11 bankruptcy in September by its beneficial owner, Connecticut-based hedge fund Black Diamond Capital Management. The company laid off 376 workers at the LaPlace plant. Another 100 employees in three other operations across the country were also laid off.

Black Diamond is a $ 9 billion hedge fund that specializes in buying debt from companies in financial distress. It first acquired Bayou Steel in 2003 for approximately US $ 185 million, including approximately US $ 30 million after the steel mill went through difficult times. He sold it five years later to Arcelor Mittal for US $ 475 million and then bought it out again at a huge discount in 2016. In the years leading up to bankruptcy, Black Diamond cut costs, including a reduction in the workforce by about a third. When the company was forced to file for Chapter 11 bankruptcy, Bayou Steel owed about US $ 100 million to approximately 2,000 creditors, including local suppliers and service providers, and had less than US $ 50,000 in liquid assets on hand. The company's fixed assets were sold in January for US $ 28 million to the Liberty Steel Group.