Inland Fiber obtains court approval of plan of reorganization

By Jennifer Lanning Drey

Portland, Ore., Nov. 9 - Inland Fiber Group, LLC and Fiber Finance Corp. obtained court approval for their joint plan of reorganization Thursday from the U.S. Bankruptcy Court for the District of Delaware, according to Glenn Siegel, an attorney with Dechert LLC, representing Inland Fiber.

As previously reported, under the plan of reorganization, holders of the company's $225 million of 9 5/8% senior notes due 2007 will receive 68.57% of the principal amount of the notes.

Holders of $158.3 million or 70.4% of the outstanding principal amount of the notes previously executed a support and lock-up agreement under which they agreed to vote in favor of the plan.

The noteholders and the trustee for the notes also previously agreed to forbear from exercising any rights and remedies under the note indenture or from pursuing any claim relating to the notes or the subject matter of the litigation.

As part of the reorganization, Inland Fiber has agreed to sell some of its assets, including its seed orchard, to a third party for $83 million, according to a previously filed motion.

The companies also entered into an agreement with their insurance carriers to contribute a total of $8.3 million toward payment under the plan of reorganization.

The sale of Oregon assets to a third party and the sale of some assets in Washington state to a related party of the companies will raise enough funds to pay the amounts due under the plan of reorganization, according to the motion.

Inland Fiber is a Klamath Falls, Ore., owner of timberland and cutting rights. Its case number is 06-10884.

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