The U.S. Bankruptcy Court approved Magnetation’s motion for an order (i) authorizing entry into and performance under an asset purchase agreement (APA) by and among the Debtors, MG Initial Purchaser (“Initial Buyer”) and ERP Iron Ore; (ii) approving the sale and transfer of the Debtors’ assets and liabilities in accordance with the APA and (iii) authorizing the assumption and assignment of certain executory contracts and unexpired leases in connection with the sale.
As previously reported, “To date, the Debtors have not received a higher or better offer than that presented by ERP, and ERP has expressed that it intends to restart the Debtors’ operations in the future, which could translate to the generation of jobs and a source of business for local vendors. Accordingly, the Debtors determined that the APA was in the best interests of the Debtors’ estates, and on December 6, 2016, the parties executed the APA.”
Court-filed documents continue, “The APA contemplates that the DIP Agent will credit bid $22.5 million of its allowed claims secured by the assets proposed to be purchased pursuant to section 363(k) of the Bankruptcy Code and applicable nonbankruptcy law and in accordance with the applicable provisions of the DIP Credit Agreement. The DIP Agent formed the Initial Buyer and contributed $22.5 million of allowed secured claims to it in order to credit bid, and the Initial Buyer will then transfer its rights and obligations under the APA to ERP in exchange for $22.5 million of notes issued by ERP and secured by collateral of ERP and certain collateral of an affiliate of ERP, and guaranteed by such affiliate and certain individuals.”
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