Cleveland-Cliffs loses bid to collect $7.35M from Boomerang asset buyer
That is when Boomerang bought approximately $7.35 million in hot-rolled steel from ArcelorMittal, later acquired by Cleveland-Cliffs. It defaulted on every invoice.
Black Diamond’s lending arm moved to collect. A sale notice landed in roughly 300 inboxes on Christmas Day 2020, with a January 3 bidding deadline. The auction went forward January 4. Two bidders showed. PTC Liberty bid $16.5 million for all of Boomerang’s personal property. Proceeds paid off Fifth Third Bank’s $16.1 million senior lien first.
Cleveland-Cliffs came after PTC Liberty on two fronts. The fraudulent transfer claim under Delaware’s Uniform Fraudulent Transfer Act (DUFTA) collapsed at the threshold. Under DUFTA, property saddled with liens exceeding its value does not count as a transferable “asset.” Boomerang’s personal property carried approximately $126.4 million in perfected liens. Cleveland-Cliffs’ own expert valued it at $104.7 million – still short by over $21 million. The court also refused to treat the Article 9 sale and later real estate foreclosures as one transaction, finding they happened months apart under different legal regimes.
Successor liability went the same way. Delaware narrowly reads the “mere continuation” exception as requiring continuity of the legal entity, not the business. No officer overlap. PTC Liberty’s executives came through a management agreement with a separate company, and none had worked at Boomerang. PTC Liberty sank over $43 million into upgrading equipment, changed its branding, and built its own customer base.
On fraud, the court found no evidence Boomerang intended to stiff its creditors. An information barrier had separated Black Diamond personnel supporting the board from those running the sale.
