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Magnetation Global Settlement Approved

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The U.S. Bankruptcy Court approved Magnetation’s joint combined motion and memorandum of law for an order for (i) approving a global settlement agreement, (ii) authorizing the Debtors to wind down their business, (iii) authorizing the Debtors to transfer certain assets, (iv) approving the wind-down incentive and retention plan, (v) approving asset sale procedures, (vi) approving abandonment procedures, (vii) approving contract rejection procedures and (viii) waiving compliance with Local Rule 9013-2(a).

As previously reported, “The primary purpose of the Wind-down is to maximize the value of the Debtors’ assets. To accomplish this objective, it is imperative that the Debtors have the ability to retain and appropriately motivate certain employees to effectively and timely implement and manage the Wind-down in order to maximize value for their estates and stakeholders….Accordingly, in order to incentivize certain members of senior management and certain non-insider management-level employees, the Debtors are proposing an incentive plan (the ‘Wind-down Incentive Plan’) that provides for payments based on specific performance metrics, including (1) achieving the Maximum Effective Date Payment, (2) monetizing the Remaining Assets and (3) controlling the costs of the Wind-down. The maximum amount expected to be paid to any one employee under the Wind-down Incentive Plan is approximately $135,000. Additionally, in order to induce non-insider Wind-down Employees to remain with the Debtors as needed during the Wind-down, the Debtors propose to provide such employees with a one-time retention payment of $10,000 to $60,000 (the ‘Wind-down Retention Plan’). The total cost of the Wind-down Incentive and Retention Plan is approximately $1.2 million.”

Court-filed documents further note, “As consideration for the Purchased Claims, AK Steel will pay on the Effective Date the Prepetition Revolving Agent, for the benefit of the Prepetition Revolving Lenders, a cash payment in the amount equal to the sum of (x) (i) $32,500,000, (ii) the value (as agreed-upon by the Debtors and AK Steel) of the Debtors’ receivables under the PPA, (iii) the value (as agreed-upon by the Debtors and AK Steel) of all of the Debtors’ other receivables (the “Miscellaneous Receivables”) purchased by AK Steel and (iv) the Debtor’s Operating Account Cash in an amount not to exceed $13,000,000 minus (y) $8,000,000 (such amount, the ‘Effective Date Payment’).”

Read more Magnetation bankruptcy news.

The post Magnetation Global Settlement Approved appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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