The federal government has raised concerns about potential conflicts of interest involving Baffinland Iron Mines Corporation representatives overseeing decisions regarding the sale of the company’s assets. Baffinland Iron Mines Corp. is seeking approval from the Ontario Superior Court to sell some of its assets, including the mine itself, to prevent the closure of one of Nunavut’s major private-sector employers. The company, which operates the Mary River Iron Mine and employs more than 1,200 workers, has been grappling with financial difficulties for several months.
In a move to address its financial challenges, Baffinland was granted creditor protection in May due to its significant debt of $2.6 billion owed to 231 creditors. To ensure the continued operation of the mine, the company secured a $660-million loan from the federal Export Development Canada (EDC) when it was on the brink of running out of funds. Orestes Pasparakis, the lawyer representing EDC, criticized the composition of Baffinland’s operating committee, highlighting potential conflicts of interest arising from personal financial stakes held by the members.
Pasparakis argued that an independent, court-appointed officer should oversee the sale process instead of Baffinland’s representatives, who may have vested interests in favoring higher-risk bids for personal gain rather than prioritizing debt repayment. Baffinland’s lawyer, Derek Ricci, disputed the government’s position, labeling it as unprecedented and based on unfounded assumptions. He accused EDC of attempting to alter the contract terms and influence the sale process through the loan.
The opposition from Baffinland to an independent overseeing entity was flagged by Pasparakis as suspicious, questioning why stakeholders were resisting an impartial party controlling the process. The Ontario Superior Court Judge Jana Steele announced that she would provide her decision in writing on a later date, following the ongoing legal proceedings.