Carol Ostrow Mar. 17, 2015, 8:40am

A steel manufacturer is suing two vendors it claims kept a $1.5 million advanced payment without delivering the product.

ArcelorMittal Burns Harbor filed a lawsuit Feb. 19 in Cook County Circuit Court against Manteno Lime Company and Synergy Management, both of which are prospective suppliers of dolomitic quick lime, a raw material used in steelmaking.

According to the complaint, on Dec. 14, 2004, the defendants agreed to have Manteno supply and deliver lime to the ArcelorMittal’s facility, stipulating amounts to be purchased, exclusive supply rights, and the installation and upkeep of an inventory management system.

Under the agreement, ArcelorMittal was to pay $3 million, with half payable in advance and the remainder contingent on satisfactory execution of goods and services.

According to the complaint, neither defendant company delivered the product spurring  ArcelorMittal to sue in 2010. A settlement was reached in 2011, with provisions to secure production in exchange for dismissal of the suit, but by April 2014, the plaintiffs contends production financing had still not been obtained.

ArcelorMittal says it provided written notice of termination Aug. 21, 2014 and that neither of the defendants returned the $1.5 million advance payment, which led it to notify them of its intent to sue in February.

The plaintiff seeks rescission of the contract and return of funds, plus attorney fees and costs. It is represented by Lynn Murray and Michael Klinger of Grippo & Elden in Chicago.

Cook County Circuit Court case number: 2015L001676.

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