MARCH 4 AUC­TION SET FOR BANK­RUPT MOLY­CORP INC.

The Denver Post - - BUSINESS - By Steven Church

Green wood Vil­lage-based Moly­corp Inc. won court per­mis­sion to put it­self up for auc­tion in March, even as bond­hold­ers com­plain that Oak­tree Cap­i­tal Man­age­ment is us­ing an un­fair ad­van­tage to try to take over the rare- earth min­ing com­pany.

Moly­corp filed for bank­ruptcy in June af­ter rare- earth prices dropped, mak­ing its Cal­i­for­nia mine un­prof­itable. The com­pany’s pro­cess­ing divi­sion, which sells rare earths from lower- cost mines in China, re­mains prof­itable. Rare earths are el­e­ments used in devices in­clud­ing mag­nets for elec­tric cars and wind tur­bines.

Af­ter about two months in me­di­a­tion with cred­i­tors, Moly­corp re­solved dis­putes over auc­tion rules that had threat­ened a sale. Pro­ceeds from an auc­tion would go to­ward re­pay­ing more than $ 500 mil­lion that Oak­tree is seek­ing and more than $ 1.4 bil­lion se­nior and ju­nior bond­hold­ers say they’re owed.

The auc­tion is sched­uled for March 4, Moly­corp at­tor­ney Lisa Lauki­tis of the Jones Day law firm said Fri­day in Wilm­ing­ton, Del., fed­eral court. Se­nior bond­hold­ers will be al­lowed put up debt in­stead of cash, a prac­tice in bank­ruptcy auc­tions known as credit bid­ding.

Left un­re­solved are bond­holder com­plaints that Oak­tree’s claims are in­flated and don’t de­serve to be honored be­fore lower- rank­ing debts. That bat­tle might not be re­solved un­til af­ter the auc­tion, when Moly­corp asks the court to ap­prove its re­or­ga­ni­za­tion plan.

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