A failed effort to find a buyer has roiled the bankruptcy of Molycorp Inc., a rare-earths company that is pursuing a plan that will make it largely the property of Oaktree Capital Group LLC, the Denver Post reported today. After scrapping an auction because of a lack of acceptable bids, Greenwood Village, Colo.-based Molycorp is trying to get out of bankruptcy reorganized around one line of business, Neo, with the fate of another still up in the air. Bondholders are saying that Molycorp wrongly rejected their bid for the Mountain Pass facility, the only bid that came in for a line of business Molycorp spent $1.7 billion to establish. Molycorp filed for chapter 11 protection in June 2015, its balance sheet rendered unworkable due to a switch in Chinese trade policy that sent the prices of rare earth's diving. Shareholders sued, and hoped to collect against Molycorp's officers and directors liability insurance. The settlement instead lets Molycorp's leaders and its insurance company off the hook in exchange for some money for unsecured creditors. Molycorp, Oaktree and unsecured creditors say the settlement was the best way out of a morass of arguments that marked the Chapter 11 proceeding. Bondholders left out of the negotiations say the deal is bad and that they will challenge it when Molycorp's bankruptcy exit plan is presented for confirmation. Read more.
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