Judge approves Miami gold refiner’s $16.5 million bankruptcy settlement

0


title=wpil_keyword_linkbankruptcy, once operated a refinery in Opa-locka that processed 350 tons of gold a year.” title=”Republic Metals Corp., which closed after bankruptcy, once operated a refinery in Opa-locka that processed 350 tons of gold a year.” loading=”lazy”/>

Republic Metals Corp., which closed after bankruptcy, once operated a refinery in Opa-locka that processed 350 tons of gold a year.

Miami Herald Archive

The family owners of a bankrupt Miami-area gold refinery – formerly among the largest in the world – have agreed to pay $16.6 million to resolve a long-running dispute with a group of banks that have lost a package of unpaid loans to the former dominant company, according to a court settlement approved Thursday.

Republic Metals Corp. filed for bankruptcy in 2018 after discovering a huge discrepancy in its gold inventory totaling up to $100 million, according to court records. Republic was once owned by the family of the late Richard Rubin before the company was sold for $25.5 million to a major Japanese refiner, Asahi. The new operation, including Republic’s former Opa-locka processing plant, is called Asahi Refining Florida.

In a “compromise” agreement filed in federal bankruptcy court, Rubin’s son and daughter, Jason and Lindsey Rubin Davis, along with their mother and the former Republic treasurer, agreed to make the settlement payments to the the company’s main bank lenders. Among them are: Mitsubishi International Corporation, Dutch financial institution Coöperatieve Rabobank, Bank Leumi and Bank Hapoalim, both Israelis, and New York-based private bank Brown Brothers Harriman.

The family’s payments are tens of millions of dollars less than secured creditors and others demanded from Republic and its former family owners in the bankruptcy case in federal court in New York.

Nonetheless, Bankruptcy Judge Sean H. Lane on Thursday called the settlement a “successful conclusion” and attorney Michael Luskin, who represented one of the banks, described it as a “milestone.”

Not everyone is happy, however. An unsecured creditor has expressed strong opposition to the settlement because his precious metals business, which held $8 million worth of gold and silver at Republic Metals before the bankruptcy, stood to gain nothing from the deal with the banks.

“Since we know that hundreds of millions of dollars of precious metals, entrusted to potential defendants, have somehow disappeared, creditors need to know what claims were asserted, what evidence supported them, and why the settlement is reasonable,” he said. writes attorney Steven Berman in a pleading on behalf of a New York precious metals business owner who lost his gold and silver holdings in Republic’s bankruptcy process.

Before approving the settlement, the bankruptcy judge obtained confidential documents showing the economic conditions of the Rubin family and their financial ability to pay bank creditors. But the judge kept those documents sealed so the public couldn’t see them.

In a recent appeal, the precious metals businessman’s attorneys are trying to recover his losses from the Rubins, secured bank creditors and others in federal court in the Southern District of New York.

Jason Rubin, the former CEO of defunct Republic Metals, declined to comment for this story. He and his sister, along with their mother, Rose Rubin, inherited the family refining business from father, Richard Rubin, who died in 2013. Until he ran into financial trouble, Republic had been in business for nearly 40 years and became the largest processor of gold in South America and Mexico, which was sold to the jewelry, technology and automotive industries.

Republic’s financial problems were uncovered in April 2018, when the company said an internal inventory could not represent a large amount of gold and silver at its Opa-locka plant. This shortfall, coupled with significant bank debt, led Republic to attempt to sell itself to a major Swiss gold refiner. The deal fell through, leading the company to file for Chapter 11 bankruptcy in federal court in New York.

In its initial bankruptcy filing, Republic acknowledged that inventory “gaps” were at the heart of its financial problems. But the company did not provide details about the actual disappearance of the gold and silver or whether it made an accounting error.

For years, Miami’s proximity to Latin America, rich in both gold deposits and drug traffickers looking to launder money, has made it a hub of the U.S. gold industry for a decade.

Republic, along with other Miami importers, came to the attention of federal agents while investigating the allegedly illicit gold trade, according to multiple law enforcement sources familiar with the investigation. Ultimately, Republic escaped prosecution and was cleared.

As the bankruptcy case unfolded, federal prosecutors in Miami reached an agreement with Republic not to pursue criminal charges against the company in 2019. The prosecutors, who were investigating money laundering and violations of secrecy law in the multi-billion dollar gold trade between Latin America and the United States, reached a “non-prosecution agreement” with the Republic.

Under the terms of the NPA, Republic has agreed to continue cooperating with the federal investigation into the gold industry and to make improvements to its anti-money laundering program. Republic did not have to pay a fine, according to the agreement, which was included in a filing in bankruptcy court in the New York case.

In the Miami gold smuggling investigation, federal prosecutors brought down Republic’s major Miami-based competitor, NTR Metals, convicting three of its gold traders in a 3.6 money laundering scheme billions of dollars. NTR’s parent company, Dallas-based Elemetal, also paid a $15 million fine in a separate plea deal.

The Miami Herald shed light on the NTR Metals affair when it published a series of investigations, “Dirty Gold, Clean Cash”, showing how the United States’ reliance on Latin American gold is driving environmental destruction. widespread, human rights violations and mercury poisoning. During a visit to a ravaged Peruvian mining town in 2019, Pope Francis condemned illegal gold as a “false god that demands human sacrifice”.

This story was originally published February 25, 2022 7:00 a.m.

Jay Weaver writes about federal crime at the crossroads of South Florida and Latin America. Since joining the Miami Herald in 1999, he’s covered the federal courts non-stop, from Elian’s custody battle to A-Rod’s steroid abuse. He was part of the Herald team that won the 2001 Pulitzer Prize for breaking news on the seizure of Elian by federal agents. He and three Herald colleagues were finalists for the 2019 Pulitzer Prize for explanatory reporting for a series on gold smuggling from South America to Miami.



Source link

Share.

Comments are closed.