ERP Iron Ore files plan based on asset and equity sales, investment

By Caroline Salls

Pittsburgh, Aug. 13 – ERP Iron Ore, LLC filed its plan of reorganization and related disclosure statement Friday with the U.S. Bankruptcy Court for the District of Minnesota.

The company said the plan provides for a reorganization through a sale of its Minnesota assets to pay off secured creditors, a plan investment to be used to recapitalize and operate its Indiana assets and a sale of new equity interests either to a plan sponsor through an already negotiated and executed plan support agreement or to a topping party.

The equity sale will be used to pay creditors and fund a liquidating trust and ERP’s operations going forward.

Pending closings of the plan transactions, the company said administrative claims will be paid in full. Progress Rail, Inc. secured claims and noteholder secured claims will also be paid in full.

Priority employee claims have been or will be paid in full.

Progress Rail, Inc. secured claims will be paid in full.

Lighthouse secured claims will be satisfied through cash distributions and a replacement five-year 3% note.

General unsecured claims will be paid from a trust funded by the liquidation trust investment in the amount of $25,000. If these creditors vote in favor of the plan, they will also receive a share of $1 million in cash that would be contributed by the plan sponsor.

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

ERP is based in Grand Rapids, Minn. An involuntary case against it was converted to a voluntary case on July 17. The Chapter 11 case number is 18-50378.

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