Marcal Paper, Highland Capital agree in principle on Lower Passaic River environmental claim settlement

By Caroline Salls

Pittsburgh, Feb. 19 - Marcal Paper Mills, Inc. and Highland Capital Management, LP have agreed in principle with the Environmental Protection Agency and U.S. Department of Justice to settle all federal environmental claims and liabilities related to releases of contaminants allegedly affecting the Lower Passaic River Study Area, according to a news release.

With this agreement, one of two major remaining closing conditions for Highland Capital's proposed purchase of substantially all of Marcal's assets has been satisfied, the release said.

Before the sale can close, an agreement also must be reached with the New Jersey Department of Environmental Protection regarding the state's Industrial Site Recovery Act.

The $160 million sale was approved by the U.S. Bankruptcy Court for the District of New Jersey on Jan. 22.

Marcal Paper Mills, an Elmwood Park, N.J., manufacturer and distributor of bath tissue, kitchen towels, napkins and facial tissue, filed for bankruptcy on Nov. 30, 2006. Its Chapter 11 case number is 06-21886.

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