AEMA, coalition launch legal challenge to BLM Conservation and Landscape Health Rule
The American Exploration & Mining Association was joined by a coalition in filing a challenge last Friday in the Wyoming district court.
Bondholders left holding the bag for bankrupt Molycorp (OTC:MCPIQ) are unhappy with the latest turn of events in bankruptcy proceedings.
The bondholders, who are owed $650 million, say that Molycorp wrongly rejected their bid – the only one that was offered – for the Mountain Pass mine and processing facility in California. They are trying to force Molycorp to sell the mineral rights and intellectual property associated with the rare earths mining operation to them, Dow Jones Business News reports.
“They are going forward with a plan today that doesn’t answer a basic question—what’s happening with Mountain Pass?” said Joshua Brody, lawyer for the bondholders, speaking at a hearing Tuesday in the U.S. Bankruptcy Court in Wilmington, Delaware. “I don’t know what they’re doing. I don’t think they do either.”
The beleaguered rare earths producer was forced into bankruptcy last June, a victim of low rare earth oxide prices. Shareholders sued the company’s officers and directors, hoping to collect on their liability insurance. According to court filings, Molycorp spent $1.7 billion to outfit Mountain Pass with specialized equipment.
A restructure plan filed with a U.S. bankruptcy court in Delaware would allow Molycorp, the only rare earths miner and processor in the United States, to emerge from Chapter 11 bankruptcy protection “either a stand-alone reorganization that would substantially de-lever its balance sheet or a sale of substantially all of its assets,” according to a press release.
“I don’t know what they’re doing. I don’t think they do either.”
The restructure plan will make Molycorp 92.5 percent the propery of Oaktree Capital Management LP, from which Molycorp received $130 million in debt financing. Unsecured creditors, including Molycorp bondholders, get the rest.
The Greenwood, Colorado- based company last year moved Mountain Pass into care and maintenance, while continuing to serve customers through its production facilities in Estonia and China.
Mountain Pass was expected to be America’s flagship source of rare earths. In 2010 Molycorp sensed an opportunity to capitalize on reduced rare earth oxide exports from China – which supplies about 90 percent of the world’s rare earth minerals – which had caused the prices of REOs to spike. When China subsequently relaxed export rules, however, prices fell, leaving Molycorp to pay the bill for a $1.25 billion expansion of Mountain Pass.
Hit by lower rare earth prices, Molycorp warned it might not have enough money to remain in business. Three months later, it filed for chapter 11 bankruptcy protection.
Comments
Douglas Jeffrey
Corporate bankruptcy needs a serious reform. When are we going to stop these frauds with filing bankruptcy in midst of lawsuit or when one is inevitable?
http://www.djjforeclosurelaw.com