Magnetation Chapter 11 bankruptcy cases set to be dismissed on May 31

By Caroline Salls

Pittsburgh, May 17 – Magnetation LLC’s Chapter 11 cases will be dismissed as of May 31, according to an order filed Thursday with the U.S. Bankruptcy Court for the District of Minnesota.

Magnetation said in its case dismissal motion that it had hoped that the debtors would be able to recover enough preference proceeds to be in a position to satisfy administrative expense claims in cash in full and make distributions to unsecured creditors.

“However, it became clear that that goal was unattainable based on the pending administrative expense claims against the debtors,” the motion said.

The company said it has reviewed and analyzed the administrative expense claims that have been filed to date and will seek to resolve any disputed claims without the need for the filing of a formal objection.

Magnetation said after taking into account the costs of the final administration of the estates and payment of professional fees, the debtors will have $1.5 million to $2 million to fund distributions on account of administrative expense claims.

In comparison, the company said the debtors estimate that valid administrative expense claims will total more than $10 million.

Magnetation, a joint venture between Magnetation, Inc. and AK Steel Corp., recovers iron ore concentrate from previously abandoned iron ore waste stockpiles and tailings basins. It is based in Grand Rapids, Minn., and filed for bankruptcy on May 5, 2015 under Chapter 11 case number 15-50307.

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