Former Essar Steel Minnesota third amended Chapter 11 plan confirmed

By Caroline Salls

Pittsburgh, June 13 – Mesabi Metallics Co. LLC, formerly Essar Steel Minnesota LLC, and ESML Holdings Inc. secured confirmation of their third amended plan of reorganization, according to an order filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

New membership interests will be issued to a plan sponsor.

The company expects to obtain a $675 million exit credit facility.

Under the plan, holders of pre-bankruptcy lender secured claims will receive a share of lender notes, class A beneficial trust interests and remaining lender cash collateral.

Holders of mechanic’s lien claims will receive a share of a recovery pool or a trade creditor note equal to the amount of the collateral securing the claim.

Holders of project unsecured claims will receive a share of the recovery pool or a share of unsecured creditor beneficial trust interests.

Holders of general unsecured claims will receive a share of unsecured creditor beneficial trust interests.

Equity interests will be canceled, and holders will receive no distribution.

In addition, two litigation trusts will be established under the plan to resolve claims and make distributions to beneficiaries.

The iron ore producer is based in Hibbing, Minn., and is part of India-based Essar Group. The company filed bankruptcy on July 8, 2016 under Chapter 11 case number 16-11626.

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