November 5, 2015
Six motions were heard by the court for various requested court orders. In addition to the motion materials, the Monitor filed five Reports to address the various motions. We attended in court before Mr. Justice Hamilton in Montreal on the motions. Copies of the motion materials and Monitor’s Reports can be accessed on the website of the Monitor (FTI Consulting) available here: http://cfcanada.fticonsulting.com/bloomlake/. The following is a summary of the court hearing for each motion.
- Motion by Wabush for an Approval and Vesting Order with respect to the Sale of Certain Assets;
The sale of a quantity of Bunker C Oil was approved to a purchaser and the judge issued the order.
- Motion by Wabush to Obtain the Release of Escrowed Funds to Bloom Lake;
This motion was adjourned and a further hearing date will be set.
- Motion by Wabush for the Issuance of an Order Approving an Agreement and Granting The Bloom Lake Iron Ore Mine Limited Partnership Authorization to Dispose of an Asset;
This motion was granted regarding the transfer of the bucket to a creditor called SMS in exchange for the release of SMS’s claim in the bucket. SMS apparently has other lien-type claims over certain other assets that remain to be resolved.
- Motion by Wabush for the Issuance of a Claims Procedure Order (“CPO”);
The CPO sets out a detailed process by which creditors can submit claims for amounts owing to them from Wabush. There were two objections filed to this motion. One by the USW and another by Quebec North Shore and Labrador Railway Company Inc.. There was much debate among the parties and the company over the terms of the CPO. We had been negotiating with the Monitor the week before the court hearing to make many changes to the order, as had other parties, and many changes were made to the original draft. In the end, the judge issued the order with changes. In this motion we made two key points to the judge in court which he noted: 1.) that the Monitor would not refer any dispute over the priority over the Newfoundland Pension Benefits Act (“Nfld. PBA”) deemed trust to a claims officer and thus confine the claim in the claims process in the CPO. Instead, the Monitor agreed to refer a dispute on the deemed trust to the court directly, and 2.) When a dispute over the priority over the Nfld. PBA deemed trust is back in court, we intend to request that the issue of the validity of the Nfld. PBA deemed trust priority in favour of pension plan beneficiaries be referred to the Newfoundland court for determination as that is an issue of Newfoundland law. The judge made note of our transfer request (although it was not to be decided at the time). We will be corresponding further with non-union employees and retirees about the CPO shortly.
- Motion by Wabush for the Issuance of an Order declaring that the Stay Period applies in respect of certain Proceedings;
This motion was adjourned and a further hearing date has been set for December 4, 2015.
- Motion by Wabush for the Issuance of an Order Extending the CCAA Stay Period;
There was an objection to the extension of the stay of proceedings filed by a creditor called MFC Industrial due to disputes this creditor had with the Monitor over the sale of the Wabush Mine. MFC wants more information but refuses to keep it confidential. The Monitor is willing to provide the information but only if it is kept confidential. There is a “deadlock” as the judge commented. The judge wants the deadlock broken and has asked for another Monitor’s report in one month reporting on the status. We submitted that we also have an interest in having the mine sold (as opposed to a possible abandonment) and offered the suggestion of appointing a mediator between the two parties. Often the mere suggestion will motivate the disputing parties to settle. There is also a theory that MFC has ulterior motives regarding the Wabush Mine and for that reason is refusing to agree to confidentiality.Despite the objection by MFC, the judge granted the stay extension, keeping the company in CCAA protection.
- Motion by a creditor regarding more Information and/or Documentation
This motion was withdrawn.