August 22, 2008

Esmark terms ArcelorMittal lawsuit without any merit

Esmark Incorporated said that it has received notice of an announcement by ArcelorMittal that it filed suit against the Company and E2 Acquisition Corporation in the Supreme Court of the State of New York alleging that the Company and E2 breached a contract to purchase the Sparrows Point steelmaking facility from ArcelorMittal.

It said that “Although neither the Company nor E2 has yet received or reviewed a complaint, in light of the circumstances surrounding the termination of the Sparrows Point sale agreement with E2 Acquisition Corporation, the company is surprised and disappointed that ArcelorMittal would file such a frivolous lawsuit.”

It added that “The company believes that any claims arising out of the contemplated Sparrows Point transaction are without merit for numerous reasons including.”

1. The Company is not a party to agreements with ArcelorMittal pertaining to the proposed Sparrows Point transactions.
2. ArcelorMittal failed to meet various conditions which were required to close the transaction;
3. ArcelorMittal failed to resolve outstanding disputes it had with the United Steelworkers pertaining to the proposed sale.
4. ArcelorMittal failed to obtain the required consent of the United Steelworkers as admitted in its November 14, 2007 earnings release, where it was stated that the Sparrows Point transaction was still pending approval of the United Steelworkers.

Esmark said that it will vigorously defend against the lawsuit and pursue any claims it has against ArcelorMittal.