Geneva Steel gets bankruptcy trustee

A bankruptcy judge on Monday approved the appointment of James T. Markus as the Chapter 11 trustee in the case of Geneva Steel.

Markus will immediately take over the affairs of the defunct Vineyard-based steel company and will replace Ken Johnsen, Geneva's chief executive officer.

Markus was unavailable for comment.

In March, Johnsen announced he would step aside as chief executive officer.

Johnsen's departure comes amid allegations of real estate transactions and high attorneys' fees among Geneva insiders that some charge will keep millions of dollars from reaching creditors.

Johnsen said his departure was a mutual decision between himself and Geneva's Official Committee of Unsecured Creditors, who are owed roughly $75 million.

The sale of Geneva's steelmaking equipment, along with its water rights, is expected to pay off $135 million owed to Geneva's secured creditors.

Geneva's remaining 1,700 acres of property likely will be sold. As trustee, Markus will seek to secure the best offer for the property. In addition, he could report any violations of the bankruptcy code.

J. Thomas Beckett, an attorney for the unsecured creditors, said he was pleased with the trustee's appointment.

"The trustee's job is kind of like a CEO of Geneva, and he takes over," Beckett said. "The question now is how do you develop the land most profitably for the unsecured creditors.

"This is a phenomenal piece of property. This is right smack dab in the fourth-fastest-growing state in the country. It should be developed. It should be beautiful, and it should be very valuable."

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