The Sewickley executive who won a 2006 proxy fight at Wheeling-Pittsburgh Steel and later sold the Ohio Valley steelmaker for USD 775 million is locked in a legal dispute with investors in another venture.
The investors accuse Esmark chairman and CEO Mr James P Bouchard and others of systematic and ongoing looting of Chicago Logistics. The Illinois company provided trucking and logistics to Wheeling-Pittsburgh, which Mr. Bouchard renamed Esmark after he gained control of the steel producer.
The lawsuit, filed in April in Chicago's Cook County Circuit Court, alleges that Mr Bouchard and other defendants leased Chicago Logistics' fleet of trucks to other companies, including companies controlled by associates of Mr Bouchard. That left Chicago Logistics with the less lucrative leasing business and gave the more profitable contracts to the companies with the truck leases.
Mr Bouchard last week asked the Chicago court to throw out the lawsuit.
He said “The complaint was based on the investors' greed and misguided sense of entitlement. The investors suing him received a windfall of more than USD 20 million on their USD 600,000 investment in Esmark when Severstal purchased the Wheeling mill.
Mr Bouchard and the other defendants said in their motion to dismiss the case.
Mr Bouchard also filed a countersuit in Allegheny County Court of Common Pleas, accusing the investors of extortion and harassment. According to that complaint, the investors threatened to humiliate Mr. Bouchard in public by serving him with a summons. That prevented him from attending important steel industry meetings in Illinois and from spending last Christmas with his 84 year old mother, the countersuit stated.
The Chicago area investors suing Mr. Bouchard and his associates are Mr Donald Chanan, Mr Robert P Perkaus Jr, Mr Laurence B Straus, Myron and Barbara Weiss and the Wolk Family Limited Partnership. They contributed USD 360,000 to get Chicago Logistics into business.
The lawsuit stated that their problems began after Esmark sold the Wheeling mill to Russian steel producer OAO Severstal for USD 775 million in August 2008 and took over Esmark's contract with Chicago Logistics.
(Sourced from post-gazette.com)
