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Bankruptcy Court OKs Sale of Marcal Paper Mills

Jan. 23, 2008 - Highland Capital Management, LP yesterday said that the U.S. Bankruptcy Court for the District of New Jersey in Newark has approved funds managed by the firm to become the new majority owner of the assets of Marcal Paper Mills, Inc.

Marcal had filed for Chapter 11 bankruptcy protection in November 2006.

Highland managed funds participating in a second lien facility, which comprise the majority lenders relating to the pending transaction, have agreed to convert a portion of their outstanding debt into an equity investment as part of the restructuring.

The sale of Marcal Paper Mills’ assets to the second lien lenders is pending closing requirements.

Other elements of the proposed deal include:

  • Aggregate total consideration of the transaction is $121.6 million plus assumed liabilities.
  • Dallas-based NexBank SSB is acting solely in its capacity as Agent for the second lien lenders involved in the planned debt/equity conversion.
  • The transaction remains subject to certain closing conditions, including the completion of an agreement with the New Jersey Department of Environmental Protection to ensure compliance with the state’s Industrial Site Recovery Act.

Founded in 1932, Marcal Paper Mills is a privately-held, family business. It employs over 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The company produces over 160,000 tons of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue.

Highland Capital Management is a investment management firm specializing in alternative investments. The firm has approximately $38 billion in assets under management and is headquartered in Dallas, Texas, with offices in New York and London.

SOURCE: Highland Capital Management




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