Saving Grace
4 days ago
Mesabi Trust Announces Arbitration Final Award (9/10/24)
NEW YORK--(BUSINESS WIRE)--AAA Arbitration Final Award
As previously reported, on October 14, 2022, Mesabi Trust initiated arbitration against Northshore Mining Company (“Northshore”), the lessee/operator of the leased lands, and its parent, Cleveland-Cliffs Inc. (“Cliffs”), with the American Arbitration Association (“AAA”). The Trust sought an award of damages relating to Cliffs’ and Northshore’s underpayment of royalties in 2020, 2021, and the first four months of 2022 by virtue of Cliffs’ and Northshore’s failure to use the highest priced arm’s-length iron ore pellet sale from the preceding four quarters in pricing certain pellet shipments from 2020 through the first four months of 2022. The Trust also sought declaratory relief related to the Trust’s entitlement to certain documentation and to the time when Cliffs’ and Northshore’s royalty obligations accrue.
The evidentiary hearing was completed before a panel of three arbitrators in March 2024 under the commercial rules of the AAA. Post-hearing briefs were exchanged in May 2024. Post-hearing oral arguments and final submissions were concluded in June 2024. The Trust received the final award on September 6, 2024, which unanimously awarded the Trust damages in the amount of $59,799,977 for underpaid royalties in 2020, 2021 and the first four months of 2022, plus pre-award interest in the amount of $11,288,269, calculated at the rate of 10% simple interest per annum from the date of the initial demand through September 1, 2024, and continuing to accrue until paid. Pursuant to the award, Cliffs and Northshore must pay the Trust the amounts specified in the Award by no later than October 6, 2024. The Tribunal approved the parties’ stipulated Consent Award approving the Trust’s ongoing entitlement to certain documentation related to verifying royalty calculations. The Tribunal denied the Trust’s request for declaratory relief regarding the time at which Cliffs’ and Northshore’s royalty obligations accrue.
Contacts
Mesabi Trust SHR Unit
Deutsche Bank Trust Company Americas
904-271-2520
https://www.businesswire.com/news/home/20240910020258/en/MESABI-TRUST-Announces-Arbitration-Final-Award
nowwhat2
2 weeks ago
U.S. Steel Stock Is Rising. The Politics Are Getting More Muddled.
https://www.marketwatch.com/articles/u-s-steel-stock-nippon-cleveland-e5c32ba3?siteid=bigcharts&dist=bigcharts
First Published: Sept. 18, 2024 at 9:40?a.m. ET
Coal on barges on the Monongahela River near United States Steel. Photo: Justin Merriman/Bloomberg
Shares of United States Steel were rising Wednesday after a report that the government decided to delay a review of the company’s potential takeover by Japanese steel firm Nippon Steel
5401
1.93%
.
This deal has plenty of political intrigue as both Democratic and Republican politicians jockey for support from labor in swing states such as Pennsylvania, where U.S. Steel
X
2.62%
is based. That hasn’t been great for investors.
Tuesday, Bloomberg reported that the U.S. would delay its decision on whether to approve the merger based on national security concerns until after the November presidential election. Nippon Steel declined to comment. U.S. Steel didn’t immediately respond to a request for comment.
“Can we get a Japanese translation for Quid Pro Quo,” quipped Gordon Haskett analyst Don Bilson in a Wednesday report, pointing out that the reported decision to delay came after the U.S. and Japan discussed curbs on exports of semiconductors to China. “A cynic might see [the chip and steel] reports as two peas in the same pod….to get the Japanese on board with China curbs, [America] has given the Japanese a wink that Nippon Steel will get the approval it needs after the election.”
U.S. Steel stock rose more than 4% in early trading, though by late morning, it had slipped back for a gain of 2.1% to $37. The S&P 500
SPX
0.01%
was flat and the Dow Jones Industrial Average
DJIA
-0.03%
was down 0.2%.
It has been a wild ride for investors lately. In August, Cleveland-Cliffs
CLF
-0.38%
bid $35 a share in cash and stock for U.S. Steel. Then in December, U.S. Steel agreed to be bought by Nippon Steel for $55 a share in cash.
Nippon Steel is the fourth-largest steel maker in the world, and has committed to spending $2.7 billion modernizing U.S. Steel’s American operations. That is significant, given that Wall Street projects U.S. Steel to generate about $1.7 billion in cumulative free cash flow in 2025 and 2026.
Still, the deal has faced political opposition from both sides of the aisle and from the steelworkers union, which backed the original Cleveland-Cliffs bid. A report that President Joe Biden was set to block the deal on national security grounds sent U.S. Steel shares to $29 each from about $38. Now, shares are almost back to $38.
The move on Wednesday shows that investors believe there is still a chance the deal will go through. Blocking the transaction never made a lot of economic sense. Japan is an ally, Nippon Steel is the far larger and better-capitalized company, and the merger doesn’t change domestic market shares substantially. If the U.S. Steel/Cleveland-Cliffs merger happened, for instance, the pair would have a greater market position in areas such as steel for critical automotive applications.
Here is a way to think about the odds of the deal going through. If the $30 range is the “no deal” price for U.S. Steel stock and $55 is the ultimate upside if Nippon Steel is successful, with the stock at about $37, investors currently put a 30% chance of the merger happening. If the stock was right between $30 and $55 the odds would be about 50%.
Coming into Wednesday trading, U.S. Steel stock was down about 26% year to date. Most of that decline is related to diminished expectations that the Nippon Steel merger will be completed.
Saving Grace
3 weeks ago
Brazilian Lourenco Goncalves being doxxed on Social Networks. Wishes to disregard U,S. First Amendment Rights.
IMO Goncalves who makes $20,000,000 annually, needs to step down.
Cleveland-Cliffs wants to unmask anonymous critic; legal expert says that raises First Amendment concerns
CLEVELAND, Ohio — For the second time in a year, the Fortune 500 steel giant Cleveland-Cliffs has asked a judge to unmask an anonymous online critic of the company and its chief executive officer, Lourenco Goncalves.
In a lawsuit, lawyers for the company asked a Cuyahoga County judge to order Yahoo Inc. to hand over personal identifying information of an account owner who has posted hundreds of comments in recent months that question Goncalves’ leadership.
The filing, submitted by Jones-Day attorney Kristin Morrison, says the company needs the information so it can pursue a defamation and libel lawsuit against the owner of the account known as Booleansearcher.
The complaint, filed earlier this month, did not specify which comments the company believes amounted to defamation. It also did not spell out exactly how the company’s reputation has been harmed.
Andrew Geronimo leads the First Amendment Law Clinic at Case Western Reserve University School of Law. He said that the case raises concerns about the First Amendment’s protections to criticize a public figure anonymously and that it could embolden powerful people to try to stifle criticism.
Geronimo successfully fought to get a similar lawsuit thrown out of court against an anonymous critic who sent emails about Beachwood police officers.
He said there are steps judges should follow in cases where someone seeks the identity of an online critic. First, he said, the plaintiff should identify the comments and then put forth a credible argument that the statements are defamatory. That should be done before a decision can be made to reveal the anonymous critic.
“If they cannot, and if the statements are protected by the First Amendment, then plaintiffs should not be able to use the court processes to strip away this important First Amendment right to speak anonymously,” Geronimo said.
The case was assigned to Cuyahoga County Common Pleas Court Judge Deborah Turner.
A spokeswoman for Cliffs did not respond to a request for comment and questions from cleveland.com and The Plain Dealer.
Booleansearcher is a prolific commenter on the Yahoo Finance message boards. The profile says the account made more than 3,100 comments on stocks and companies ranging from the online sports betting giant DraftKings and 3M to Cisco and Costco, as well as multiple steel industry companies.
A comment from earlier this month claimed the only reason Cleveland-Cliffs maintained a high public evaluation was “the hope that it will be bought or a better CEO will come in” who will make wholesale changes.
“This can’t be run like a private company for the family wealth,” the post said. “It is a public company so it needs to be managed for shareholders. That just ain’t happening with LG [Goncalves], but many oddly here are so happy that he gets 20 million a year.”
In a post made last year, the user claimed to be a shareholder in the company and questioned whether Goncalves was “really the guy to take this to the next level.”
In the complaint, filed Jan. 16, the company said the comments “include statements without basis and contrary to fact that attack Mr. Goncalves’ business reputation and honesty, including the exercise of his and others at Cliffs’ fiduciary duties to shareholders.” The lawsuit also said the statements are “injurious to Mr. Goncalves’ reputation and the business interests of Cliffs.”
It also said the company sent letters to the email address associated with the account on Jan. 2 and Jan. 8, and both times received bounce-back messages that the inbox was full and could not accept messages.
The company used the same tactic in January 2023 to identify three users who made similarly critical comments. Judge Sherrie Miday granted the request and ordered Yahoo to hand Cliffs the account information to identify the commenters.
The company then filed a defamation and libel lawsuit against the three men. That complaint identified several comments from the men that accused Goncalves of wrongdoing. The defamation lawsuit settled out of court in August.
The company made a similar move in 2015.
Geronimo said that, like the case in Beachwood, Cleveland-Cliffs and Goncalves are public officials so the First Amendment casts broad protections over statements about them.
But this lawsuit differs from the Beachwood case. That’s because the company’s lawyers are using a civil rule that allows people who think they might have a reason to sue somebody to obtain discovery to identify the potential defendant before they actually file the lawsuit.
In Beachwood, lawyers first filed the lawsuit against unnamed defendants, then asked the judge to order an encrypted email server to identify the owner of an anonymous account.
Doing so allows a judge to sign off on the request as long as the plaintiffs show that they don’t know the identity of the person they might sue and that they tried to learn the person’s identity through other means.
Geronimo said he hopes that judges will apply the same standard that Judge Andrew Santoli applied in the Beachwood case to any case in which a public figure wants to learn the identity of an anonymous online critic.
That includes making the person who wants the information show that the statements were false and damaged someone’s reputation.
“Defamation isn’t just ‘you wrote these things, and it made me look bad,’” Geronimo said. “You’re supposed to be able to trace some tangible harm that happened as a result of the comments.”
Geronimo compared the comments about Goncalves to those made about businessman Elon Musk, who has been widely ridiculed after his purchase and rebranding of X, the social media platform formerly known as Twitter.
“It’s hard for me to think this CEO of a major company is actually having his reputation affected by comments on a message board,” he said.
https://www.cleveland.com/court-justice/2024/01/cleveland-cliffs-wants-to-unmask-anonymous-critic-legal-expert-says-that-raises-first-amendment-concerns.html
abracky
3 weeks ago
Cleveland-Cliffs Successfully Amends Asset-Based Lending Facility
Source: Business Wire
Cleveland-Cliffs Inc. (NYSE: CLF) (“Cliffs”) today announced that it successfully amended its $4.75 billion Asset-Based Lending (ABL) facility as part of the financing for the pending acquisition of Stelco Holdings Inc. (“Stelco”). Cliffs has completely replaced Goldman Sachs’ participation with increased commitments from Bank of America, Wells Fargo, J.P. Morgan, Fifth Third, Truist, Capital One, BMO, Huntington, and U.S. Bank. Additionally, PNC, Flagstar, UBS, MUFG, Regions, Barclays, ING, RBC, and First Citizens have also maintained their existing commitments to the ABL.
Cliffs’ Chairman, President and CEO, Lourenco Goncalves said: “In this latest ABL amendment, our capital request was three times over-subscribed, showing continued strong support from our banking partners. We thank our entire bank group for their participation as we focus on partners who share our strategic priorities. As we position Cliffs for further growth in the United States and Canada, this amendment reinforces our strong financial position and ability to close the Stelco transaction quickly and efficiently in the fourth quarter of 2024.”
As of the finalization of the amendment, Cliffs had no net borrowings on its ABL facility. The amended ABL matures in 2028.
About Cleveland-Cliffs Inc.
Cleveland-Cliffs is a leading North America-based steel producer with focus on value-added sheet products, particularly for the automotive industry. The Company is vertically integrated from the mining of iron ore, production of pellets and direct reduced iron, and processing of ferrous scrap through primary steelmaking and downstream finishing, stamping, tooling, and tubing. Headquartered in Cleveland, Ohio, Cleveland-Cliffs employs approximately 28,000 people across its operations in the United States and Canada.
Forward-Looking Statements
This release contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. All statements other than historical facts, including, without limitation, statements regarding our current expectations, estimates and projections about our industry, our businesses, our financial position or a transaction with Stelco, are forward-looking statements. We caution investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and future trends to differ materially from those matters expressed in or implied by such forward-looking statements. Investors are cautioned not to place undue reliance on forward-looking statements. Among the risks and uncertainties that could cause actual results to differ from those described in forward-looking statements are the following: our ability to maintain adequate liquidity, our level of indebtedness and the availability of capital could limit our financial flexibility and cash flow necessary to fund working capital, planned capital expenditures, acquisitions, and other general corporate purposes or ongoing needs of our business, or to repurchase our common shares; adverse changes in credit ratings, interest rates, foreign currency rates and tax laws; our ability to consummate any public or private acquisition transactions and to realize any or all of the anticipated benefits or estimated future synergies, as well as to successfully integrate any acquired businesses into our existing businesses; the risk that the proposed transaction with Stelco may not be consummated; the risk that a transaction with Stelco may be less accretive than expected, or may be dilutive, to Cliffs’ earnings per share, which may negatively affect the market price of Cliffs’ common shares; the risk that adverse reactions or changes to business or regulatory relationships may result from the announcement or completion of the proposed Stelco transaction; the possibility of the occurrence of any event, change or other circumstance that could give rise to the right of one or both of Cliffs or Stelco to terminate the transaction agreement between the two companies, including, but not limited to, the companies’ inability to obtain necessary regulatory approvals; the risk of shareholder litigation relating to the proposed transaction that could be instituted against Stelco, Cliffs or their respective directors and officers; the possibility that Cliffs and Stelco will incur significant transaction and other costs in connection with the proposed transaction, which may be in excess of those anticipated by Cliffs; the risk that the financing transactions to be undertaken in connection with the proposed Stelco transaction may have a negative impact on the combined company’s credit profile, financial condition or financial flexibility; the possibility that the anticipated benefits of the proposed acquisition of Stelco are not realized to the same extent as projected and that the integration of the acquired business into Cliffs’ existing business, including uncertainties associated with maintaining relationships with customers, vendors and employees, is not as successful as expected; the risk that future synergies from the Stelco acquisition may not be realized or may take longer than expected to achieve; the risk that any announcements relating to, or the completion of, the proposed Stelco transaction could have adverse effects on the market price of Cliffs' common shares; and the risk of any unforeseen liabilities and future capital expenditures related to the proposed Stelco transaction.
For additional factors affecting the business of Cliffs, refer to Part I – Item 1A. Risk Factors of Cliffs’ Annual Report on Form 10-K for the year ended December 31, 2023, and other filings with the U.S. Securities and Exchange Commission.
?
View source version on businesswire.com: https://www.businesswire.com/news/home/20240912372016/en/
MEDIA CONTACT:
Patricia Persico
Senior Director, Corporate Communications
(216) 694-5316
INVESTOR CONTACT:
James Kerr
Director, Investor Relations
(216) 694-7719
birdguy
4 weeks ago
Owners of ill-fated taconite plant in northern Minnesota score legal victory against Cleveland-Cliffs
A federal judge denied Cliffs’ motion for summary judgment, paving the way for Mesabi Metallics antitrust claims to go trial.
By Mike Hughlett
The Minnesota Star Tribune
Mesabi Metallics has long claimed that anticompetitive behavior by iron ore heavyweight Cleveland-Cliffs damaged its quest to build a taconite plant in Nashwauk.
This week, a federal bankruptcy court judge handed Mesabi a victory, ruling that its antitrust claims against Cliffs are strong enough to go to trial.
“There is sufficient evidence that permits a reasonable juror to conclude that Cliffs’ conduct was anticompetitive,” wrote Craig Goldblatt, a U.S. Bankruptcy Court judge in Delaware.
Mesabi plans to seek $1.9 billion in damages.
On Thursday, Mesabi Metallics CEO Joe Broking said in a statement the company hopes the judge’s decision will help “address the past disappointment caused to our partners and stakeholders by the previous delays to the project.”
Mesabi Metallics is the corporate successor to Essar Steel Minnesota, which started building a $2 billion-plus taconite facility about 13 years ago in the Iron Range of Minnesota. By 2016, Essar Minnesota filed Chapter 11 bankruptcy, leaving a half-built plant.
In 2017, Essar Minnesota sued Cleveland-Cliffs in bankruptcy court, alleging the iron ore merchant wrongfully used its market power to choke the Nashwauk project. Essar, which was rechristened Mesabi Metallics in late 2017, has been battling Cliffs in court for years and trying to complete its taconite plant.
Cliffs has contended it did not exercise monopoly power against Mesabi and that Mesabi suffered no antitrust injuries. Cliffs asked the bankruptcy court for a summary judgment against Mesabi, which would essentially throw the case out.
But in a Wednesday filing, Goldblatt denied Cliffs’ motion for summary judgment, saying there are enough factual disputes to merit a trial in federal district court.
“A [reasonable] jury could find that Mesabi suffered the type of injury that antitrust law is intended to prevent,” he wrote.
From 2015 to 2019, Cleveland-Cliffs was by far the largest independent iron ore merchant for the Great Lakes steel business with 73% to 78% of the “non-captive” market for taconite pellets, Mesabi claims. The term “captive” refers to iron mines owned directly by steel companies. In 2020, Cliffs bought two major U.S. steelmakers and now primarily produces iron ore for its own captive steel mills.
Minnesota Supreme Court rejects Mesabi Metallics' bid to keep critical iron ore leases
The Nashwauk plant would have competed with Cliffs in the non-captive market. Essar made a critical deal in 2014 to supply taconite pellets to ArcelorMittal’s U.S. subsidiary, then one of the nation’s two largest steelmakers. But ArcelorMittal terminated the contract in 2016 since Essar had yet to finish its Nashwauk plant.
Cliffs then signed a 10-year agreement with ArcelorMittal. Mesabi Metallics claims Cliffs structured the contract to give Cliffs exclusive access to Arcelor and shut Mesabi out of the market.
Mesabi Metallics also claims Cliffs’ anticompetitive conduct included blackballing construction contractors who worked on Mesabi’s project. The Jamar Co. and Barr Engineering, two prominent Minnesota contractors, had worked for both Mesabi and Cliffs. Cliffs refused to let Jamar continue to work on ongoing projects — or bid on new ones, Goldblatt’s ruling said. Once Jamar stopped supporting Mesabi, it got its Cliffs business back. A similar tale unfolded with Barr.
Mesabi alleges Cliffs’ anticompetitive conduct also includes its 2017 purchase of mineral rights from a company called Glacier Park. The Glacier Park leases were crucial to Mesabi. Mesabi claims Cliffs didn’t need the leases, but it scooped them up to undermine its Nashwauk project.
Cliffs, which declined to comment on the recent filing, has refuted Mesabi’s claims in court documents.
Mesabi Metallics was dealt a big blow when it missed yet another state deadline in 2021. The Minnesota Department of Natural Resources revoked Mesabi’s state-issued mineral leases. Last year, it awarded them to Cleveland-Cliffs.
Still, Mesabi Metallics has continued pursuing the Nashwauk project. The company has 30 employees and plans to hire up to 70 more by the end of the year. Mesabi says it will invest another $650 million to complete the plant, which it says is “on track” to open in early 2026.
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