Gorham Paper and Tissue Files for Bankruptcy, Investment Firm to Buy Assets, Continue Operation
A New York investment company plans to acquire most of Gorham Paper & Tissue and its subsidiary, White Mountain Tissue, for $8.75 million in cash and the assumption of several million dollars in liabilities.
Nov. 24, 2020 - Gorham Paper and Tissue, LLC of Gorham, New Hampshire, on November 4 filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 20-12814). The company reports $1 to $10 million in assets and $50 to $100 million in liabilities.
It has been reported that Gorham Paper and Tissue has also agreed to sell the mill assets to an investment group interested in operating the facility and entered into an asset purchase agreement with Behrens Investment Group on Nov. 4.
According to a news report by the Berlin Sun, the deal, which the parties expect to close during the bankruptcy proceedings, would see the New York investment company acquire most of Gorham Paper & Tissue and its subsidiary, White Mountain Tissue, for $8.75 million in cash and the assumption of several million dollars in liabilities.
Behrens will serve as a stalking horse bidder in the proposed auction and has agreed to provide, subject to the bankruptcy court's approval, financing to allow Gorham Paper keep operating through the bankruptcy proceedings.
The mill currently has 106 employees, including both salaried and hourly, the Berlin Sun news report said.
A release issued by Gorham Paper & Tissue Chief Executive Officer Dick Arnold said the two companies will immediately file a motion seeking the court's approval of bid procedures in connection with the sale to Behrens. Other parties will be offered the opportunity to submit higher and better bids for the company's assets. Arnold described Behrens's efforts as "comprehensive" and "very collaborative."
In a news report by the Salmon Press, Berlin (New Hampshire) Mayor Paul Grenier is quoted as saying, "I met with the investment group [in the first week of November] and they are interested in the continued operation of the facility. They have had engineers at the facility over the past four months looking at every aspect of the building's operation and equipment needed to really turn the facility around. Much of it is just investing in modernizing the energy delivery systems and removing wasteful buildings. They want to right size the footprint of the operation so that they can, over time, invest in converting products now being made on the machines."
About Gorham Paper and Tissue
In May of 2011, Gorham Paper and Tissue, LLC acquired the former Fraser Papers paper mill via investment funds managed by Patriarch Partners, LLC. That year the company invested $35 million in a new tissue machine, which began producing commercial tissue paper grades in 2012 under the name White Mountain Tissue.
The Gorham site also operated two fine paper machines, which were idled in 2014 as a result of the company's focus on towel and tissue products.
In the fall of 2016, the company reported production capacity of about 70,000 tons per year.
SOURCES: Gorham Paper and Tissue and online regional news reports