voda schreef op 10 juli 2017 16:52:
Essar Steel Minnesota and ArcelorMittal reach compromise on USD 1 billion claim
Law 360 reported that Essar Steel Minnesota LLC and its successors reported a USD 605 million Chapter 11 compromise last week on a disputed, more than USD 1 billion claim filed by global steelmaker ArcelorMittal over unmet iron ore supply agreements. Essar, now reorganizing in Delaware bankruptcy court as Mesabi Metallics Co LLC, said the deal with ArcelorMittal USA LLC was a supportable exercise of Essar’s business judgment that will head off continued and costly litigation.
Essar said in a motion Wednesday for court approval “The debtors have analyzed the underlying contracts and believe that the allowed amount of the ArcelorMittal claim, as fixed by the agreement, is fair and reasonable,”
ArcelorMittal had filed its claim in September 2016, citing purportedly higher costs for iron ore purchased from alternate sources after Essar’s unfinished mine and mill near Nashwauk, Minnesota, failed to meet supply commitments dating to December 2012.
Company officials had taken a far different position last year, seeking a court order compelling the release of documents from rival mine and mill operator Cliffs Natural Resources Inc. At the time, Essar suggested that Cliffs, an ArcelorMittal supplier, might face a claim for tortious interference with Essar's contractual relationships.
Although Cliffs sought an order quashing Essar’s subpoena, Bankruptcy Judge Brendan L. Shannon partly sided with the bankrupt company, allowing limited access to Cliffs’ contract information.
Essar argued that the $1 billion damages estimate claimed by ArcelorMittal reflected unsupported assumptions about the difference between the original contract and replacement supplies over a 10-year period. Absent from the estimate, Essar said, was a discount to reflect the present value of the potential future expense.
During discovery, ArcelorMittal produced four pellet supply contracts, with details from two other Cliffs supply agreements delivered later.
The compromise revealed Wednesday marked another big step toward Mesabi’s emergence as a going concern under a more than $1 billion restructuring that includes a new owner and long-term plan to produce up to 10 billion tons of iron ore annually.
Source : Law 360