In re ICTS[MG Metals]

Richard,

Marcus told me that wanted to refer to you and me the above-referenced new MG
Metals matter. Briefly, ICTS of Athens, Alabama, one of MG Metals' shipping
agents, has reportedly gone into bankruptcy, without paying about $80,000
owed to various motor carriers (truckers) for transportation here in the U.S
of MG Metal's aluminum. No one has yet confirmed that ICTS has in fact gone
into bankruptcy.

MG Metals' offices in Canada and New York have begun receiving truckers'
demand letters for these freight charges, some of which are from attorneys
threatening suit. These letters state that as consignee of the various
cargoes, MG Metals is primarily liable for payment of the freight charges. I
think that this is generally correct as a matter of U.S. law, given the usual
motor carrier bills of lading, although I am having this double-checked.

Since we have already paid most (but not all) of the money we owed to ICTS,
MG Metals is looking at a double-payment exposure. Also, even to the extent
that ICTS has not been paid, it is entirely possible that ICTS overextended
itself with a particular trucker and failed to charge MG Metals for enough to
cover both ICTS's commission and the trucker's freight charges; in other
words, a trucker may be looking for MG Metals to pay it more in freight than
MG Metals originally agreed to pay ICTS (which amount should have covered
both freight and commission).

I believe that the largest single amount claimed by a trucker is $15,000.
Bob Klide of MG's New York office and Nicole Dion of MG's Canada office (no
relationship to Celine--I asked) will be shortly sending me their files.

To complicate things a bit more, many of the letters Nicole has received deal
with shipments made in March, at a time when Nicole and her office were
employees of a trading division of Barclay's. Some time afterward, they were
acquired by MG Metals. As a result of this, Barclay's may (depending on the
agreement between Barclay's and MG Metals) be on the hook for some of this
liability. Nicole advises she has place a Barclay's representative on notice.

I would be happy to take this one off your plate if you would like.
Obviously, it is a small dollar case and we don't want to pay any money to
anyone unless we absolutely have to. Let me know.

Britt