Molycorp has reached a settlement with the unsecured creditors’ committee in its chapter 11 case on the terms of a modified reorganization plan, Forbes.com reported yesterday. Under the proposed settlement, unsecured creditors (including deficiency claims arising from the 10 percent senior secured notes) would receive 7.5 percent of the reorganized company’s equity in the event of a standalone reorganization plan, with senior lender Oaktree Capital Management receiving 92.5 percent of the reorganized equity. If there is a sale of the entire company under the plan, unsecured creditors (again, including deficiency claims) would receive 7.5 percent of the proceeds of the sale, with Oaktree receiving 92.5 percent. Under the standalone option, the company’s reorganized equity value would be $417 million, meaning that the unsecured claim distribution would be valued at $31.3 million.
