Item 3. Legal Proceedings

In October 2006, IPSCO and certain other entities and individuals, including NSG and its directors, were sued by a shareholder of NSG in a purported class action lawsuit challenging the then-proposed acquisition of NSG by IPSCO (the “merger”). The lawsuit was filed in the Campbell County Circuit Court of the Commonwealth of Kentucky and alleged, among other things, that the merger consideration to be paid to the shareholders of NSG in the merger was unfair and inadequate as a result of alleged breaches of fiduciary duty by NSG and its directors. The complaint further alleged, among other things, that the NSG defendants failed to disclose to NSG shareholders certain information regarding the negotiation of the merger agreement, including information relating to NSG and its directors’ consideration of alternative transactions and to the financial analysis conducted by NSG financial advisor. The complaint also alleged, among other things, that IPSCO aided and abetted NSG and its directors in the breaches of their duties to NSG shareholders. The complaint seeks compensatory and/or rescissory damages to the class and an award of attorneys’ fees and expenses to the plaintiff, among other relief. On November 28, 2006, the defendants, including IPSCO, entered into an agreement in principle with the plaintiff for the settlement of the lawsuit. The proposed settlement is subject to confirmatory discovery by plaintiff’s counsel and to court approval. As part of the agreement in principle to settle the lawsuit, NSG agreed to, and did, make certain disclosures of information sought by plaintiff, and IPSCO agreed that it would limit the circumstances under which it would receive a termination fee in the event that the merger agreement were terminated. (The merger agreement was not terminated, and the merger closed in December 2006.)  The agreement in principle provides that, upon completing of confirmatory discovery by plaintiff’s counsel, the parties will submit a stipulation of settlement to the court, pursuant to which, subject to prior notice to the proposed class and approval by the court, the plaintiff class will release the defendants from all claims relating to the merger, excepting any statutory rights to appraisal, and pursuant to which, again subject to prior notice to the class and approval by the court, defendants will pay the attorneys’ fees of plaintiff’s counsel in an amount awarded by the court, but not to exceed $475,000. The parties are in the process of conducting confirmatory discovery. Upon completion of such discovery, the parties will submit the proposed stipulation of settlement to the court for an order directing notice to the plaintiff class and scheduling a hearing for the court to consider approval of the proposed settlement and attorneys’ fees.

On December 31, 2005, we reached a favorable settlement arising out of a lawsuit for cost overruns we brought against the construction manager and various contractors who were involved in the construction of the Mobile Steelworks.

In July 2005 and November 2005, we were named as defendants in two multi-plaintiff lawsuits filed in the Circuit Court of Mobile County, Alabama and styled Aldridge, et, al. v. IPSCO, et. al., CV-05-2474 and Caster et. al. v. IPSCO, et. al., CV-05-4072, respectively. The plaintiffs in both actions allege that, among other things, excessive noise and fumes emanate from the Mobile Steelworks and seek an unspecified amount of damages. The Company is defending both claims.

We are also engaged in various lawsuits and matters arising out of the ordinary conduct of our business, including those related to environmental matters. While the ultimate results of such suits or other proceedings against us cannot be predicted with certainty, we believe the resolution of these matters will not have a material adverse effect on our consolidated financial condition or results of operations.