Judge OKs Loan for Idled NH Mills
Associated Press, February 8,
AP — A U.S. Bankruptcy Court judge,
yesterday, approved a plan by a Connecticut company to lend the owner
of two struggling North Country mills money to maintain the facilities
through the winter.
Earlier this week, officials from Fraser Papers Inc. of Stamford,
Conn., asked Judge Erwin Katz in Wilmington, Del., for permission to
lend the bankrupt Pulp and Paper of America $2 million to maintain the
mills in Gorham and Berlin.
Pulp and Paper will use the loan to maintain the mills during the
next two months while it tries to sell them. Fraser is one of several
potential buyers for the mills. No offers have been made, and no price
has been discussed publicly.
Cascades Inc. of Kingsey Falls, Quebec, made a similar offer.
Cascades offered to take responsibility for the maintenance of the
plants through the winter, but creditors objected to the offer, saying
the plan mainly would benefit Cascades and make it more difficult to
find a buyer.
Cascades' proposal would have limited purchase negotiations to
Cascades, Fraser and Keating Fibre of Fort Washington, Pa. Fraser's
agreement does not preclude other companies from bidding.
The loan would be secured by liens on a landfill and hydroelectric
plants that Pulp and Paper owns. The proposed interest rate is the
prime rate plus 2.5 percentage points.
The pulp and paper mills closed in August, laying off 860 workers.
In September, Pulp and Paper and its parent company, American Tissue
Inc. of Hauppauge, N.Y., filed for bankruptcy protection.