Pope & Talbot gets court OK for pulp business sale break-up fee of $3.8 million

By Rebecca Melvin

New York, Jan. 16 - Pope & Talbot Inc. received court approval of a $3.8 million break-up fee and related provisions for the $105.29 million sale of its pulp business, according to a Wednesday order of the U.S. Bankruptcy Court of the District of Delaware.

The order stated that the break-up fee is a material inducement for and condition of the stalking horse bidder's entering into the asset purchase agreement.

As previously reported, Pope & Talbot has agreed to pay the break-up fee to stalking horse bidder PT Pindo Deli Pulp & Paper Mills if the related cure costs exceed the cash purchase price, if the auction is postponed from the current Feb. 5 auction date or if the sale does not close by Feb. 13.

In an objection filed Friday, Pope & Talbot's U.S. Trustee said the break-up fee was excessive, and that the stalking horse bid notice doesn't give any information on what the total cure costs are expected to be.

Last month, Pope & Talbot received approval of the bidding procedures for the proposed sale of its wood pulp business assets, and it had until Jan. 8 to select a stalking horse bidder.

Pope & Talbot, a Portland, Ore.-based pulp and wood products company, filed for bankruptcy on Nov. 19. Its Chapter 11 case number is 07-11738.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.