Scotiabank Sues Cliffs Natural Resources for $52.6 Million for Breach of Loan Terms

Reuters reported Thursday that the Bank of Nova Scotia (TSX:BNS) has filed a lawsuit against Cliffs Natural Resources Inc. (NYSE:CLF) for breaching the terms of a loan agreement when it filed for creditor protection for its operations in Canada. Scotiabank has claimed damages for the sum of $52.6 million.

As quoted in the market news:

Cliffs in January stopped production at its Bloom Lake mine in Quebec, where costs exceeded expectations, and started restructuring the Canadian operations after years of weak iron ore prices. Cliffs’ shares fell as much as 7.2 percent in morning trading on the New York Stock Exchange on Thursday.

The move to file for creditor protection in Canada accelerated Cliffs’ payment obligations, Scotiabank said in a lawsuit filed in a U.S. District Court in Ohio on March 16. Scotiabank is claiming damages of about $52.6 million.

In response to the bank’s notices, Cliffs denied that it was obligated to repay the debt immediately, Scotiabank said in the lawsuit.

Click here to read the full Reuters report.