Former Essar Steel Minnesota files suit alleging business interference

By Caroline Salls

Pittsburgh, Sept. 8 – Mesabi Metallics Co. LLC, formerly Essar Steel Minnesota LLC, filed a lawsuit against Cleveland-Cliffs, Inc., formerly Cliffs Natural Resources, Inc., and 10 unnamed defendants, alleging that the defendants interfered with its contractual and business relationships, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

“Already controlling virtually the entire open market for blast furnace pellets within the Great Lakes pellet and iron market, Cliffs has long coveted Mesabi’s surface and mineral leases, and sought to solidify and preserve its monopoly position,” the complaint said.

“Having failed to block Mesabi’s attempt to enter into the Great Lakes pellet and iron market and secure the debtors’ assets for itself legally in an open public auction conducted during the bankruptcy proceeding, Cliffs (and other defendants in conspiracy with it) has now resorted to illegal attempts to obstruct consummation of the debtors’ plan of reorganization in an effort to block completion of [a company project].”

Specifically, Mesabi said Cliffs and the other defendants have contacted Mesabi’s contractors, mineral lessors, professionals, other goods and service providers and potential customers to allegedly threaten that Cliffs will not do business with them if they do business with Mesabi or its Chapter 11 plan sponsor.

The company said this interference has caused significant delay and additional unnecessary expense as it seeks to complete its bankruptcy case.

Through the lawsuit, Mesabi is seeking payment of damages and asking the court to grant an injunction against the defendants’ attempts to interfere with its contractual and business relationships.

The iron ore producer is based in Hibbing, Minn., and is part of India-based Essar Group. The company filed bankruptcy on July 8, 2016 under Chapter 11 case number 16-11626.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.