US Magnesium Creditors Object to Bid From Sole Equity Holder

US Magnesium LLC’s junior creditors opposed a lead bid by the former magnesium production facility’s sole equity holder for the bankrupt company’s assets, saying it brings no meaningful benefit to creditors.

The proposed sale to Renco Group Inc. provides vague consideration that benefits lender Well Fargo Bank NA and leaves the estate administratively insolvent, a committee of unsecured creditors said in a Jan. 9 filing in the US Bankruptcy Court for the District of Delaware.

Renco, US Magnesium’s sole equity owner, provided more than $400 million to the company in the last 10 years, guaranteed Wells Fargo’s loans, and helped ...