Recently, pawnbrokers have mentioned bankruptcy, and in particular the Republic Metals bankruptcy proceeding that commenced on November 2, 2018. Pawnbrokers and vendors will recall that Team GRC distributed three Alerts on Republic Metals’ filing for reorganization during November 2018. These GRC Alerts remain available on the NPA website.
In the third quarter of 2020, the bankruptcy trustee began filing actions (known as “preference” actions or “claw backs”) to recover funds paid out in the 90 days prior to November 2, 2018. These actions were filed against unsecured vendors to Republic Metals including pawnbrokers and refiners. Bankruptcy law provides defenses that many pawnbrokers and refiners involved have claimed against the trustee’s right to recover payments.
The bankruptcy court has begun approving some settlements in these preference actions; actions against others continue. We assume that many of these defendants will have statutory defenses also, and that more settlements may be forthcoming.
Other pawnbrokers and refiners have claims against Republic for property delivered to Republic Metals within 20 days of the November 2, 2018 bankruptcy petition’s filing. The trustee refers to these pending claimants as Title Property Owners. A few of these claims were settled prior to October 31, 2019; other claims in this group worth tens of millions of dollars appear to be in settlement negotiations. The trustee requested an extension to September 6, 2021 to respond to the remaining claims.
Team GRC will continue to monitor the movement in the Republic Metals bankruptcy proceeding and will provide updates to you as we have something significant to report.