Molycorp Minerals $5M Financing Intended to Maintain Mountain Pass Mine and Fund
Marketing Process Is Approved
Mon 09/26/2016 17:30 PM
In a brief uncontested hearing this afternoon, Judge Christopher Sontchi approved the
proposed financing intended to keep the Molycorp Minerals debtors’ chapter 11 case alive
and provide sufficient time for a marketing process of the Mountain Pass mine. The up to
$5 million in financing is to be provided by Lexon Insurance affiliate Ironshore
Indemnity, and it would initially comprise a $1.5 million secured administrative expense
facility to fund the administration of the case and a $2.7 million unsecured operating
expense facility to ensure regulatory compliance and maintenance of the mine’s “cold
Vince Marriott of Ballard Spahr, counsel to Molycorp Minerals chapter 11 trustee Paul
Harner, noted during today’s hearing that the financing agreement was reached through
“creative dialogue” and that it has indeed been “challenging” to obtain necessary
liquidity to maintain the mine and fund a marketing process. Marriott also stated that
the chapter 11 trustee has retained Batuta Capital Advisors to engage in the marketing
process for the mine and that although the firm’s retention application is scheduled for
the October omnibus hearing, it has started its work.
After Judge Sontchi approved the uncontested financing, parties confirmed that the
chapter 11 trustee’s motion to dismiss the Molycorp Minerals case and Molycorp Inc.’s
and Oaktree’s motion to convert the Minerals case to chapter 7 are both now mooted and
would be withdrawn.
Further, at the conclusion of the hearing, counsel to the unsecured creditors committee
and the Office of the United State Trustee confirmed that the members of the committee
would resign from the committee with respect to the Minerals cases in order to decrease
administrative expense, considering how far out of the money unsecured creditors are at
the Molycorp Minerals debtors.
The next hearing in the Minerals case is scheduled for Oct. 27 at 10 a.m. EDT.