Republic Metals Corporation – Unsecured Creditors Object to Debtors Use of Cash Collateral, Cite Concerns Over Unresolved Ownership of Refined Materials

November 27, 2018 – The Debtors’ Official Committee of Unsecured Creditors (the “Committee”) objected [Docket No. 193] to the Debtors’ use of cash collateral. The objection asserts, “The Debtors seek authority to use the purported cash collateral of the Prepetition Secured Parties to continue refining and selling raw materials to maximize value in a manner that meets the Prepetition Secured Parties’ expectations with regard to timing, disbursements, and receipts. In many cases, this type of relief is appropriate and, in fact, uncontroversial. This case does not fall within that category. As of the filing of this Objection, more than 40 parties have filed objections to the Motion, demands for reclamation, or similar pleadings raising core questions as to ownership of the materials being refined and liquidated by the Debtors, and the entitlement of the Prepetition Secured Parties to those proceeds….To date, no process has been introduced by the Debtors to confront and adjudicate these threshold matters in a fair and level manner that does not tip the scale in favor of the Prepetition Secured Patties….These disputes…must be resolved in a balanced and streamlined process that fosters due process, preserves evidence, and minimizes prejudice and administrative cost. Appropriate and universal procedures governing these issues, including a timeline and process for discovery and adjudication, can and should be included in any final Cash Collateral order entered by the Court.”