Manistique Papers' $12.3 million asset sale to MPI wins court approval

By Jim Witters

Wilmington, Del., April 17 - Manistique Papers, Inc. won court approval on April 17 for the sale of substantially all the company's assets to stalking horse bidder MPI Acquisition LLC for $12.3 million.

The sale hearing moved forward after no additional bids were received before the deadline, debtors attorney Timothy F. Nixon said during a hearing in the U.S. Bankruptcy Court for the District of Delaware.

The debtor-in-possession financing lender, mBank, which also assumed the loan of the prepetition lender, declined to submit a credit bid, Nixon said.

mBank holds a $14.4 million claim against the estate but has agreed to accept $11.7 million, leaving cash with the debtors to pay administrative claims, Nixon said.

mBank also will provide financing to the new owners.

The buyers have negotiated a new contract with the United Steelworkers Union and reached agreement with the union and Pension Benefit Guaranty Corp. to terminate the company's fixed-benefit pension plan.

The debtors will come before the court for approval of the pension plan termination in the near future, Nixon said.

"With this agreement, we withdrew our conditional objection and look forward to working with MPI to make this a successful business going forward," said Susan Kaufman, the union's attorney.

Manistique Papers, a Manistique, Mich., recycled-fiber specialty paper producer, filed for bankruptcy on Aug. 12, 2011. Its Chapter 11 case number is 11-12562.

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