Marcal Paper Mills gets court approval of plan of liquidation

By Jennifer Lanning Drey

Portland, Ore., March 3 - Marcal Paper Mills, Inc. was granted court approval for its plan of liquidation Tuesday from the U.S. Bankruptcy Court for the District of New Jersey, according to a source familiar with the case.

As previously reported, Marcal Paper Mills' plan of liquidation is based on the $121.6 million sale of the company's assets to second-lien lender agent NexBank SSB.

Any remaining assets will be distributed to creditors by a liquidating trustee.

Plan creditor treatment

Treatment of creditors under the plan will include:

• Holders of $6,100 to $7,100 in administrative claims, $200 in priority tax claims, $100 in other priority claims and $80 to $100 in reclamation claims will recover 100% in cash;

• $28,000 to $33,000 in post-bankruptcy administrative trade claims will be assumed and paid by NexBank for a 100% recovery;

• $64,000 to $65,000 in pre-bankruptcy second-lien secured lender claims will be satisfied only to the extent of any NexBank credit bid for the assets. The remaining claim amount will be treated as a general unsecured claim.

• Holders of $50 to $100 in other secured claims will either be assumed by the asset purchaser and paid in accordance with the purchase agreement or the liquidating trustee will return the collateral securing the claim to the claimant, at the asset purchaser's option.

In addition, the liquidating trustee can seek a ruling on the amount of the allowed secured portion of the other secured claims, and any undersecured portion will be treated as a general unsecured claim;

• Holders of $71,000 to $1.1 million in general unsecured claims will receive a share of the net assets of the liquidating trust; and

• Old equity interests will be cancelled, and holders will not receive any distribution under the plan.

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.

© 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.