US Magnesium Creditors Seek Claims Against Renco, Wells Fargo

US Magnesium LLC’s creditors have asked to step into the shoes of the bankrupt base metals company to pursue claims against its owner, Renco Group Inc., and lender Wells Fargo Bank NA.

US Magnesium is unwilling and contractually unable to pursue claims against Renco and Wells Fargo, which creates a conflict of interest that harms creditors, the company’s unsecured creditors’ committee said in a Jan. 2 motion in the US Bankruptcy Court for the District of Delaware.

Wells Fargo and Renco failed to properly secure interests from a $60 million insurance policy fight with Ace American Insurance Co., according to ...