The Itasca County Board of Supervisors is going on record opposing an agreement that would see the remaining assets of bankrupt Magnetation Inc., go to a Roanoke, Va., millionaire.
After meeting in closed session, the board voted 4-0 Monday evening to instruct the county attorney to file a motion with the federal bankruptcy court opposing the sale agreement struck between Magention and Tom Clarke, owner of newly-formed ERP Iron Ore.
Grand Rapids-based Magnetation says the sale is the last best hope to reopen the company's three iron ore recovery operations on the Iron Range. Oral arguments will be made on the proposed sale Thursday in federal court in St. Paul.
County officials aren't against the shuttered Magnetation operations resuming. But they continue to face legal action from contractors who did work for Magnetation operations and who are owed millions of dollars for past due bills. Those contractors have filed mechanic's liens against the company's Plant No. 4, which sits on land leased from the county, and they are claiming in court that the county is liable for the project's debts - up to $28 million.
Itasca County so far has declined to offer the lease to any new owner, apparently until the contractors drop their legal action.
Clarke told the News Tribune last week that obtaining the county lease is critical for his deal to move forward and reopen Magnetation and said the mechanic's lien issue must be solved quickly.