While the value of "scrap" appeared to be higher than the bidders who bought it, I'd imagine the disassembly, cleanup, etc., would have created quite a cost that would have eaten up whatever they got for it. Once the sale of the company didn't work and they got the bids for the assets, the secured creditors surely had an opportunity to suggest it be scrapped if it really meant more recovery to them, but they didn't, so while I really can't speak to the net cash from scrapping the plant, I suspect those creditors had a pretty good grip on what they'd get if they pushed for that.
The IP went with the plant in the liquidation for $4.34M, and if the plant had been scrapped, I expect the monitor and court would have sold it all off to the highest bidder and it likely would not have fetched much. Remember again that after the SISP failed, the company was going out of business, and the monitor and court go into the mode of liquidating (or scrapping) everything of any value to maximize the recoveries to the creditors. That's the deal, the company gets protection from the creditors when they enter into bankruptcy/CCAA, but the judge also ensures those creditors interests are protected.
