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Replies to post #1208 on Cleveland Cliffs Inc (CLF)
12/23/15 6:47 PM
Dayton is demanding Essar pay $10 million to the state, through Itasca County, with $3.4 million of that due within 45 days and $6.6 million by March 31.
Dayton also is demanding Essar pay the remaining $55.9 million in 16 quarterly payments starting March 31, 2017 — at which point Essar hopes to be making and selling taconite iron ore pellets and making its first money at the new plant under construction in Nashwauk.
“Essar appreciates the work of Gov. Dayton and his staff in putting together the state’s proposed repayment terms,” said Mitch Brunfelt, Essar spokesman, in a prepared comment. “Essar also appreciates that the governor and his staff clearly recognize the vital importance of this huge project to the long-term economic vitality of the region, particularly Itasca County and the western end of the Iron Range. We are reviewing the state’s proposal internally here at Essar and will respond in due course. Essar also is continuing to work diligently in its efforts to keep payments flowing to local contractors and vendors.”
While Dayton appears ready to get that money back, the effort may not be as easy as simply filing a lawsuit, which is the most likely course of action. Most of the state money was funneled through Itasca County, Nashwauk and the city’s public utilities commission, and those entities would need to agree to pursue the case.
Essar’s debts to the state and contractors aren’t its only outstanding problems. In September, a federal judge entered a $32.9 million judgment against the firm after a jury agreed Essar violated a contract for natural gas to serve its Nashwauk taconite project. Essar is appealing that order.
