Molycorp Inc. is moving forward with a restructuring plan that some creditors said would benefit its senior lender, Oaktree Capital Management LLC, after a mediation aimed at devising a new plan failed, Bloomberg News reported yesterday. The parties couldn’t agree to terms on how to handle a sale of assets, and, as a result, the company’s existing restructuring plan remains in effect. Creditors of the bankrupt rare-earths miner had been engaged in negotiations over the past two weeks after some lenders accused Molycorp of running a “specious sale process” that benefited Oaktree. The contending creditor groups, which included JHL Capital Group LLC, the largest holder of the company’s senior bonds, maintained that the process gave Oaktree veto power and made it impossible to persuade potential buyers to join an auction. The mediation’s collapse means the contending creditors now must try to devise a new sales process if they seek to challenge the current plan as the bidding continues.
