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Allied Nevada mine buyer objects to contract language in loan order
By Kali Hays
New York, May 1 – Allied Nevada Gold Corp. asset purchaser WK Mining (USA), Ltd. asked the U.S. Bankruptcy Court for the District of Delaware to reconsider its April 17 order granting final approval of Allied’s $78 million debtor-in-possession loan, according to a Friday motion.
WK Mining purchased a mining facility in Nevada from Allied VNC, Inc. at the end of April. The purchase agreement included an anti-assignment clause related to a provision whereby Allied retained a right to hold a 25% interest in a limited liability company to be formed by WK Mining to operate the purchased facility.
The agreement also allows for WK Mining to acquire that retained interest for a flat fee of $10 million at the discretion of Allied.
With its reconsideration motion, WK Mining is seeking clarification regarding the anti-assignment clause, as it claims it had “no reasonable expectation that a DIP financing order would contain a provision that arguably would eviscerate any anti-assignment clauses in any contracts that the debtors seek to sell at a future sale hearing.”
Specifically, under a section of the DIP loan order directed toward landlord and lease agreements, language refers to “any provision of any lease or...license, contract or other agreement...is hereby deemed unenforceable.”
WK Mining asked the court to clarify or amend the DIP loan order with respect to its purchase agreement and to establish that certain language of the DIP loan order “is not applicable to the WK agreement.”
A hearing is set for June 18.
Allied Nevada is a Reno, Nev., gold and silver miner that filed for bankruptcy on March 10. Its Chapter 11 case number is 15-10503.
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