Molycorp Inc.’s unsecured creditors want to investigate lender Oaktree Capital Management LP, which they say loaded the rare-earths miner with debt in transactions the creditors may sue to challenge in court, the Wall Street Journal reported today. Molycorp’s unsecured creditors’ committee is asking the bankruptcy court to let it question Oaktree employees and review various documents about transactions between the Los Angeles-based private-equity firm and Molycorp that took place in the months before Molycorp’s chapter 11 filing. Oaktree provided funding to Molycorp before the chapter 11 filing and has since provided the company with a $130 million bankruptcy-financing package. The committee said that it is investigating potential claims and litigation against Oaktree related to these transactions, including possibly seeking to unwind them. Other possible claims include aiding and abetting breaches of fiduciary duty, the committee said, as well as reviewing whether Oaktree may have violated securities laws with respect to its trading of Molycorp securities.
