Louisville, Kentucky — US Trustee William K. Harrington on Tuesday afternoon urged a federal bankruptcy judge to appoint an examiner to investigate the ownership of millions of dollars in raw and processed precious metals and inventory held by Republic Metals Refining Corp., which filed for Chapter 11 reorganization November 2.
Republic, based in Miami, Florida, asked the New York court November 28 for permission to sell property in its possession "free and clear of liens," including metal orders already pre-paid by approximately 40 customers.
Harrington, who on November 19 appointed an unsecured creditors committee comprising Coeur Rochester, Bayside Metal Exchange, So Accurate Group, Cyber-Fox Trading, Minera Triton Argentina S.A., Pyropure Inc., and Mineral Real de Ora S.A., called the ownership dispute a "critical threshold" issue that must be resolved.
"The committee and the dozens of individual creditors who have filed reclamation notices and objections to the debtors' recent motion for use of cash collateral have raised core questions regarding the extent to which the debtors are holding property that belongs to other parties, and whether such property, if any, should be returned at this juncture to the owners of record," he said.
The trustee wants the court to postpone a scheduled Wednesday hearing on Republic's sale request and, instead, appoint an examiner by January 9, "or as soon thereafter as counsel can be heard" for an order directing the appointment of an examiner.
Because of the various pending reclamation claims, it makes more sense to consolidate them and "for these issues to be investigated and reported on by a disinterested and impartial examiner," Harrington added.
His motion was filed the same day Judge Sean Lane approved a settlement agreement between Republic and Cornerstone Asset Metals for the release of 1,150 oz of finished silver Cornerstone previously purchased from Republic.
Under the deal, Cornerstone also will be allowed a general unsecured claim of $157,934 for the unfinished silver it sent to Republic prior to the bankruptcy filing. -- Bob Matyi, newsdesk@spglobal.com
-- Edited by Nick Jonson, newsdesk@spglobal.com