March 17, 2017 10:14 PM
Mesabi Metallics has submitted an amended Chapter 11 bankruptcy plan and an amended disclosure statement.
On Thursday, the court approved the disclosure statement. The statement provides information about the proposed reorganization, such as values and risks.
In it, the company, which was formerly known as Essar Steel Minnesota, said they have made progress, including identifying and speaking with potential customers, and reaching agreements on extending private mineral leases.
But they acknowledge their impasse with the Minnesota DNR and Governor Mark Dayton over the state leases is a critical sticking point in the case.
Governor Dayton does not want Mesabi Metallics to assume the mineral leases.
The disclosure statement says the fate of the company is tied directly to them getting the state leases. Mesabi Metallics said the plan has been crafted to meet the objectives of the state, adding that a new lessee would take at least five years to get to the point that Mesabi Metallics is in the process. Dayton has indicated he wants to give the leases to another company, Cliffs Natural Resources.
An attorney working on the case said that now the amended disclosure statement and reorganization plan will be sent to the creditors, who will vote on them.
Then, in late April, the bankruptcy court judge will hold a hearing about the reorganization plan, and could sign off on it then.
Mesabi Metallics' CEO, Matthew Stock, stated: "With the Bankruptcy Court's approval of our Disclosure Statement, we have crossed another important threshold in our chapter 11 reorganization efforts and are gaining momentum as we proceed forward to our plan confirmation hearing at the end of April. After the April hearing, we hope to be in a position to successfully emerge from bankruptcy as a reorganized company and to move ahead with completion of this historic and vitally important project for our region."
Also this week, Mesabi Metallics was granted approval to renew a project labor agreement for future construction.The company's general counsel also said that they can enter into an agreement with the Steelworkers, so that essentially opens the door for the union to engage in a campaign to unionize Mesabi Metallics' hourly employees. The decision to unionize will be with the employees, not the company.
Updated: March 17, 2017 10:14 PM
Created: March 17, 2017 04:21 PM
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