SGL ain't broke, but can bankruptcy fix it?

• Position: SGL Carbon Corp.

A trip to bankruptcy court usually means you're broke. Perhaps no one mentioned that to SGL Carbon Corp. When it filed for Chapter 11 protection, the Charlotte-based producer of graphite electrodes for steel-making furnaces was solvent - healthy enough to promise to continue paying vendors what they're owed. So what's it doing in bankruptcy?

The reason is a federal price-fixing probe - and the lawsuits that grew out of it. SGL is one of four electrode makers that the U.S. Justice Department has investigated. The others have settled both criminal and civil cases, and German parent SGL Carbon AG set aside $246 million for possible fines and settlements, both in the United States and elsewhere. But that's not enough to cover what a group of 19 U.S. plaintiffs is demanding - an undisclosed figure the company calls "excessive and unreasonable." SGL is also facing a suit brought separately by Charlotte steel maker Nucor Corp., which claims it was overcharged $40 million.

In a sense, SGL is hoping to force those plaintiffs into better terms by putting the issue in the hands of a bankruptcy judge. "Obviously, we didn't feel we had any choice," says Wayne Burgess, the U.S. company's president. "If we had satisfied what they wanted us to do, we would have been severely impaired." Another factor: German...