ERP Iron Ore trustee seeks approval of settlement with Merida, Lara

By Sarah Lizee

Olympia, Wash., May 18 – ERP Iron Ore, LLC Chapter 7 trustee Nauni J. Manty is seeking approval of a settlement with Merida National Resources, LLC and Lara Natural Resources, LLC, according to a notice filed with the U.S. Bankruptcy Court for the District of Minnesota.

Merida was the Chapter 11 debtor-in-possession lender to the debtor and now has a post-petition Chapter 11 administrative expense claim in the amount of $1.62 million.

The settlement changes the payment terms of Merida’s allowed claim. Merida has agreed to compromise its claim by reducing it by $250,000.

In addition, Lara Natural Resources, which is owned by the same two individuals that own Merida, has an unsecured claim in the amount of $1.53 million.

Lara has agreed to withdraw its proof of claim.

After payment to Merida, the parties will have no further claims in ERP’s bankruptcy case and all claims will be deemed withdrawn.

The trustee said she has enough funds to pay the Chapter 7 administrative expenses and the other smaller Chapter 11 administrative expense claims in full.

The trustee said the additional $250,000 will be disbursed to the other creditors and parties in interest of the estate.

The trustee is hoping for the transaction to be completed by June 9.

ERP is based in Grand Rapids, Minn. An involuntary case against it was converted to a voluntary case on July 17, 2018. The Chapter 7 case number is 18-50378.

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