💥New Chapter 11 Bankruptcy Filing - Aleon Metals LLC💥
Recycler looks to salvage itself with a fast-paced sale while in bankruptcy.
On August 17, 2025, Freeport, TX-based Aleon Metals LLC (“Aleon Metals”) and two affiliates, Aleon Renewable Metals LLC (“ARM”) and Gladieux Metals Recycling LLC (“GMR” and together with Aleon Metals and ARM, the “debtors”), filed chapter 11 sale cases in the Southern District of Texas (Judge Lopez). The debtors “… own and operate the largest petroleum catalyst recycling facility of its kind in North America … which can process up to 55,000 tons of material per year,” extracting “… vanadium, molybdenum, and other valuable metals with a variety of chemical and industrial applications” along the way.
Here’s CRO Roy Gallagher (of Ankura Consulting Group, LLC) putting more meat on the bone:
“Under the Debtors’ model, refiners pay the Debtors to offtake spent catalyst for a fixed recycling fee. The Debtors then extract high-purity vanadium and molybdenum from the catalyst and sell them into specialty markets including battery manufacturing, steelmaking, and even the synthesis of new hydrocarbon refinement catalyst (completing the ‘circle of life’).[] In turn, the Debtors credit a portion of the proceeds from the sale of the extracted metals back to the original refiners.”
When metal prices are “normal,” the credit exceeds the fee, and vice versa when it’s low. Here’s a debtor-supplied illustration.
Take one guess which one played out on the ground. Back to Mr. Gallagher:
“The Debtors’ business, while strategically located and technologically advanced, has been subject to significant volatility in commodity prices, particularly for vanadium and molybdenum, which are the primary metals recovered from spent catalyst. Despite the partial hedge against metals prices inherent to the Debtors’ business model, this volatility nonetheless has resulted in unpredictable revenue streams and periods of negative cash flow.”
But it wasn’t solely that. The debtors also had operational disruptions, most notably the failure of their sulfur dioxide scrubber, which removes acid-rain-causing gas from the exhaust generated at their facilities and rendered ‘em unable to process “… any material amount …” of catalyst from February to June ‘25. Throughput dropped to an average of 2.3k tons per year in the TTM preceding the petition date, or ~3.9% of their permitted capacity.
Plus, the debtors “… faced challenges in securing reliable supply of … catalyst, which are essential feedstocks for their recycling operations.”* Why? Debtors, show us what’s in your pockets:
Or, as Mr. Gallagher so innocuously puts it:
“Relationships with key suppliers became strained because of past due payables and market uncertainty, further complicating efforts to maintain consistent plant utilization.”
Not ideal when your capital structure is this mangled, muni-debt-infested** mess …***
… which made an out-of-court “… impracticable” and includes ~$17.8mm bridge in bridge financing by a group of holders holding a supermajority of the debtors’ revenue bonds (the “bondholder group”).****
So the debtors are heading to bankruptcy court, which is fitting because GMR purchased its facility out of Gulf Chemical & Metallurgical Corporation’s (“Gulf Chemical”) chapter 11 back in ‘17. In chapter 11, the debtors are looking to do the same as Gulf Chemical: sell their assets to the highest bidder.
To kick off the next circle of life, the bondholder group is stepping up as the DIP provider and stalking horse purchaser “… via a credit bid of its claims under the DIP Facility, the assumption of liabilities, and the payment of cash.”
How much cash? Good question because the emergency bidding procedures motion has a total blank. For that and the actual amount being credit bid, 🤦. Although, notwithstanding the lack of clarity, the group’s looking for an up-to $2.5mm expense reimbursement for its service and the following proposed 45-day sale timeline:
The DIP itself is a headline ~$187.5mm term loan, composed of ~$62.5mm in new money ($17.5mm interim) and a 2:1, ~$125mm roll-up of the bondholder group’s revenue bonds ☝️. The DIP bears interest at one-month term SOFR + 10% (cash for the new money, PIK for the roll-up) and has a 3% OID commitment fee and a 3% exit fee.
The court held a one-hour-and-change first day hearing on August 18, 2025. Prior to the hearing, Mason Metals, LLC (“Mason Metals”), which is party to a repo agreement with GMR under which Mason Metals purchases calcine — an intermediate metal product containing nickel, cobalt, molybdenum, and vanadium — from GMR only to later sell it back (at a higher price), didn’t want to lose its valuables and objected to the debtors’ DIP and proposed bidding procedures. However, folks landed on position-protecting comfort language ahead of time and no fireworks went off, 😔.
Otherwise, the first-day went off without a hitch … except the bidding procedures. Judge Lopez wasn’t keen on approving bid protections — even ho-hum expense reimbursements – with zero notice. But day-one roll-ups be chill.
In any event, the court punted that motion to this Friday, August 22, 2025 at 10am CT and scheduled the second-day hearing for September 17, 2025 at 2pm CT.
The debtors are represented by Morrison Foerster LLP (Jennifer Marines, Benjamin Butterfield, Andrew Kissner, Ilayna Guevrekian, Joseph Murphy, Donghao “Helen” Yan) and Norton Rose Fulbright US LLP (Jason Boland, Bob Bruner, Julie Harrison, Maria Mokrzycka) as legal counsel, Ankura Consulting LLC (Roy Gallagher) as financial advisor and CRO, and Jefferies Group LLC (Richard Morgner, Paul Shin) as investment banker. Tim Pohl is the debtors’ independent manager. The bondholder group and UMB Bank, N.A., as trustee under each series of revenue bonds and prepetition superpriority and DIP agent, are represented by Arnold & Porter Kaye Scholer LLP (Michael Messersmith, Sarah Gryll, Owen Haney, Marjorie Carter, Christopher Odell). Mason Metals is represented by Haynes and Boone, LLP (Ken Kattner, David Staab).
*The debtors got interim relief to pay $2.5mm in critical vendor claims, including feedstock providers, with another $200k to follow in final approval.
**For those new to the game, the debtors’ revenue bonds are the municipal (aka “muni”) debt. Here, they are tax-exempt bonds issued by the Brazoria County Industrial Development Corporation (the “Municipal Issuer”), which in turn lent the proceeds to the debtors and are secured by (i) the Municipal Issuer’s rights under the proceeds-providing loan agreements, (ii) amounts held by UMB Bank, N.A., as indenture trustee under each series, (iii) the debtors’ applicable real estate and associated leases, rents, etc., and (iv) revenues generated by the debtors’ applicable projects, plus, in the case of ARM, substantially all of its assets, including an electric arc furnace.
***The Gladieux Metal Note Payable and the Gladieux Metal Subordinated Loan were provided by 72.6% equity holder Gladieux Metals, LLC, an affiliate of major-industrial-recycle-project-developer Jefferson Enterprise Management, while the FTAI loan was provided by an affiliate of 27.4% equity holder FTAI Infrastructure Inc. ($FIP).
****The members of the bondholder group have not yet been disclosed.
Company Professionals:
Legal: Morrison Foerster LLP (Jennifer Marines, Benjamin Butterfield, Andrew Kissner, Ilayna Guevrekian, Joseph Murphy, Donghao “Helen” Yan) and Norton Rose Fulbright US LLP (Jason Boland, Bob Bruner, Julie Harrison, Maria Mokrzycka)
Financial Advisor and CRO: Ankura Consulting LLC (Roy Gallagher)
Investment Banker: Jefferies Group LLC (Richard Morgner, Paul Shin)
Independent Manager: Tim Pohl
Claims Agent: Stretto (Click here for free docket access)
Other Parties in Interest:
Bondholder Group and UMB Bank, N.A., as Revenue Bond Trustee and Prepetition Superpriority and DIP Agent
Legal: Arnold & Porter Kaye Scholer LLP (Michael Messersmith, Sarah Gryll, Owen Haney, Marjorie Carter, Christopher Odell)
Creditor: Mason Metals, LLC
Legal: Haynes and Boone, LLP (Ken Kattner, David Staab)