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 PITTSBURGH, April 19 /PRNewswire/ -- Acting on behalf of its client, Freedom Forge Corporation, Doepken Keevican Weiss & Medved Professional Corporation has filed objections to the approval of Edgewater Steel's recent disclosure statement.
 These objections show that the disclosure statement mischaracterizes Freedom Forge's claims against Edgewater Steel and fails to present the full impact of Freedom Forge's claims for creditors to consider. The objections also raise serious doubts about Edgewater Steel's financial disclosures and projections, and about its ability to continue as a viable business enterprise. The announcement was made today by Peter N. Pross, attorney for Freedom Forge Corporation and principal at Doepken Keevican Weiss & Medved Professional Corporation.
 The disclosure statement in a bankruptcy proceeding is like a prospectus and should be materially accurate so that creditors can make informed decisions when they cast votes relative to a proposed reorganization.
 "We filed these objections," said Pross, "because Edgewater Steel has omitted critical information from its disclosure statement and needs to provide more accurate information to all creditors, including Freedom Forge. This includes furnishing more realistic financial and business information than its present disclosure statement contains.
 "We also want all other creditors to know that Freedom Forge remains unalterably opposed to Edgewater Steel's reorganization plan and will vote to prevent its confirmation.
 "Edgewater Steel owes Freedom Forge $500,000 for steel ingots shipped before Edgewater's bankruptcy petition, and an additional $1.5 million for steel ingots shipped to Edgewater Steel as part of the consideration for the sale of certain equipment and Edgewater Steel's wheel business to Freedom Forge. Freedom Forge supplied the steel in good faith after Edgewater Steel filed its bankruptcy petition on April 21, 1992, but Edgewater Steel reneged on its contractual obligations to sell the assets or to pay for the $1.5 million owed to Freedom Forge over a three-year period, but Freedom Forge wants payment in full by Sept. 30, 1993, to avoid hampering its own business.
 "Like many other steel companies, Freedom Forge is working to maintain its own health in a highly competitive industry and in a difficult economy, particularly the aerospace sector. Freedom Forge has recently closed its plant in Warren, Ohio, resulting in a loss of 400 jobs there, and had major layoffs at its plant in Latrobe, Pa., and Burnham, Pa. The company needs the $2 million from the sale of steel ingots to Edgewater Steel for capital investment to upgrade its facilities to maintain its business and to protect the jobs of its 1,100 employees at these locations."
 Freedom Forge manufactures high-quality, super alloy rings for the aerospace industry, and produces specialty steels, railway wheels, axles and assemblies, open and closed die forgings, and precision-machined components for jet engine and other gas turbine applications.
 According to Pross, Edgewater Steel's current disclosure statement:
 -- Fails to mention that Freedom Forge may be entitled to various priority administrative claims against Edgewater Steel. If Freedom Forge is awarded these claims, Edgewater Steel must pay them in full and in cash, when a reorganization plan is approved. The priority administrative claims sought by Freedom Forge include:
 - Damages from Edgewater Steel's failure to use its best efforts to sell its equipment and wheel business by Sept. 30, 1992.
 - The $1.5 million worth of steel products supplied by Freedom Forge as partial payment for the sale of Edgewater Steel's equipment and wheel business.
 - Payment of a lien of approximately $296,000 on Edgewater Steel's inventory.
 -- Neglects to spell out that Edgewater Steel's projected first year sales of $38.7 million after reorganization are 14 percent above the company's 1992 sales level. There is no indication how the company plans to reach this level, or to recapture market share and sales volume lost during the bankruptcy period, when customers may have found alternative suppliers.
 -- Fails to support Edgewater Steel's projected, but highly improbable, 5 percent compounded annual growth rate for four consecutive year after reorganization.
 -- Omits any support for its claim that period expenses in the first year after reorganization can be reduced to slightly less than $4 million, or 10.3 percent of sales, and 8.4 percent in the fifth year. This expense amounted to 16.3 percent of sales in 1991 and over 15 percent of sales, or more than $5 million, in 1992.
 -- Makes no provision for any increase in period expenses for the five years covered by its reorganization plan.
 -- Optimistically projects approximately $2.6 million for general, administrative and selling costs with no annual increase over the five years of the reorganization plan.
 -- Fails to point out that projected pre-tax income of 2.4 percent in year one of the plan is almost double the industry average of 1.3 percent of sales. The projected pre-tax income of almost 4.5 percent of sales in year five is almost quadruple the industry average for companies the size of Edgewater Steel.
 -- Fails to contain in its disclosure statement a supporting opinion by a certified public accounting firm, thereby casting significant doubt on the credibility and reliability of its financial statements and projections.
 Doepken Keevican Weiss & Medved Professional Corporation is headquartered in Pittsburgh, with other offices in Harrisburg, Pa., and Bloomfield Hills, Mich.
 -0- 4/19/93
 /CONTACT: Peter N. Pross of Doepken Keevican Weiss & Medved Professional Corporation, 412-355-2736, or Henry T. Walshak of Walshak Communications, Inc., 412-835-7770, for Doepken Keevican Weiss & Medved/

CO: Freedom Forge Corporation; Doepken Keevican Weiss & Medved
 Professional Corporation; Edgewater Steel ST: Pennsylvania IN: MNG SU:

DM-KC -- PG005 -- 7425 04/19/93 12:55 EDT
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Publication:PR Newswire
Date:Apr 19, 1993

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