U.S. Court Approves Smart Paper's Reorganization Plan
Dec. 20, 2006 - Smart Papers LLC today said that the U.S. Bankruptcy Court for the District of Delaware has approved and confirmed its business reorganization plan, paving the way for emergence from Chapter 11 upon the company's sale to an affiliate of Plainfield Asset Management LLC.
According to Smart Papers, the plan was accepted by a majority of voting creditors. It is also supported by the company's secured lender, its unsecured creditors committee, and Memphis-based International Paper, Smart Papers added.
The company's Plan of Reorganization, which was approved yesterday, calls for the Smart Papers to:
- Issue 92.5 percent of its shares to Plainfield Special Situations Master Fund Limited, a hedge fund group based in Connecticut. Plainfield assumed up to $40 million of Smart Papers' debt in August, and will have a seat on the board.
- Divide the remaining 7.5 percent of shares among unsecured claim holders on a pro-rated basis;
- Pay $630,000 to International Paper, the previous owner of its Hamilton paper mill, then pay it another $1 million with interest by June 30.
Smart Papers filed for bankruptcy on March 22, 2006 after the company was hampered by increasing costs for energy, wood fiber, transportation and logistics.
In June, Smart Papers sold its paper mill in Park Falls, Wisconsin to a group of investors who reopened the mill under the name Flambeau River Papers, LLC. Smart also auctioned off its Illinois distribution and warehouse facilities in late October.
Smart Papers LLC was created in 2001 when investment group Sun Capital Partners bought the Hamilton paper mill from International Paper.
SOURCE: Smart Papers LLC