Molycorp Lawyer Tells Judge Don't `Hold Your Breath' for Dealby
Judge says stalled negotiations make for `laugh or cry' moment
Molycorp creditor fight threatens reorganization effort
Warring creditors of Molycorp Inc. are nowhere near a deal to reorganize the bankrupt mining company, but at least they can joke about it.
On Thursday, U.S. Bankruptcy Judge Christopher Sontchi in Wilmington, Delaware, teased the two main creditor lawyers battling over the company’s fate about plans to announce an end to their disputes.
“I might not recommend you hold your breath,” Andrew Leblanc, attorney for Oaktree Capital Management LP, told Sontchi during a brief hearing.
“Oh well, laugh or cry, Mr. Leblanc,” Sontchi responded.
Oaktree, Molycorp’s senior lender, is battling a committee of lower-ranking creditors over the size of its loans and how best to restructure the company. Oaktree and Molycorp agree that loans made before and after the bankruptcy bring the amount owed to Oaktree to $514 million. Other creditors, including bondholders owed $1.4 billion, are disputing that figure.
If lower-ranking creditors can prove the loans are smaller than Oaktree claims, they may be able to collect more should the company be sold or reorganized.
Molycorp filed for bankruptcy in June after a drop in rare-earth prices made its California mine unprofitable. The company is planning to either sell itself at an auction or, if no bids are high enough, reorganize and reduce debt by turning itself over to Oaktree.
The case is In re Molycorp Inc., 15-bk-11357, U.S. Bankruptcy Court, District of Delaware (Wilmington).