Duff and Phelps Canada Restructuring Inc. has been appointed as the monitor under the Companies' Creditors Arrangement Act.
LIM, which has projects and mines in the Labrador Trough region, says it has been hurt by low iron ore prices and did not resume mining operations in the 2014 or 2015 operating seasons.
The company also announced Thursday it has sold its interest in the Howse project to its joint venture partner, Tata Steel Minerals Canada, for $5.0 million.
The money will be used to fund expenses.
The company says it plans to develop a comprehensive restructuring plan,that may see the company sell non-core assets.
"LIM is confident that if its current debts and key operating contracts can be restructured, the company will be able to preserve its key assets, including the flagship Houston Project, pending a recovery in the price of iron ore, and secure the necessary development financing to resume operations in a profitable and responsible fashion for the benefit of all stakeholders and local communities," the company said in a statement.