Essar Steel Minnesota Owes $1.1 Billion to Creditors

by San Antonio Attorney

Essar Steel Minnesota declared liabilities amounting to $1.1 billion, over fivefold its declared assets, based on bankruptcy documents filed.

Together with Essar’s parent company, ESML Holdings, it filed a joint financial statement in the U.S. Bankruptcy Court in Delaware on Aug. 16, providing a partial view on the financial pressures placed on some contractors owed a lot of money.

The bankruptcy petition of Essar ends the clash between the Minnesota officials and the company, with the future of the state mineral leases and Nashwauk project uncertain.

The company’s court filing reveal over $1.1 billion debt and $208 million in property and assets.

There are 324 creditors who have filed claims against Essar. There are 19 secured creditors in the Range area, and there are 56 have unsecured claims that are non-priority.

The total of secured claims is $1.087 billion.

Mineral leases in the state are caught up in the bankruptcy case, creating another tension between Essar officials and Minnesota Gov. Mark Dayton.

Essar failed to pay its due to the state of costs of infrastructure on July 1. Because of that, the company may forfeit the rights to the leases. The Department of Natural Resources (DNR) can terminate the company’s right.

On July 8, the company was notified about the leases that would be terminated by 12:01 p.m. on that same day. However, Essar filed a bankruptcy petition at 11:30 a.m., subjecting the leases for evaluation by the bankruptcy court.

Dayton has said that a legal action has been commenced by the attorney general’s office to release the leases, though it may take more time before anything is formally filed.

SOK Advusirs LLC, the new manager of Nashwauk facility, has obtained the bankrupt court’s approval to obtain $35 million in financing for the development.

Leave a Comment

Previous post:

Next post: