Each issue of PaperMoney is approximately 500 fact filled pages.
Click here for Pulp & Paper Radio International
The Paperitalo Library
Free Downloads
My Profile
Management Side
Lincoln Paper Finds Potential Buyer to Begin Auction

Lincoln, Maine, USA 09 October 2015 -- (From the Portland Press Herald) -- Lincoln Paper and Tissue has found a company willing to place an opening bid of $5 million in the upcoming auction for the bankrupt paper mill's machinery.

In court documents filed Thursday, the paper mill said it signed an asset purchase agreement this week with LP Acquisitions LLC, a subsidiary of Reich Brothers, a company with offices in New York and California that specializes in the "acquisition and disposition of distressed and surplus assets," according to its website.

The asset purchase agreement requires the Reich Brothers' subsidiary to provide an opening bid of $5 million for the mill's paper machines and other physical assets. That price does not include the buildings or land.

Lincoln Paper, which filed for Chapter 11 bankruptcy on Sept. 28, marketed its assets to more than 150 other parties and entered into 36 non-disclosure agreements with interested parties before selecting Reich Brothers as what's known as the "stalking horse" bidder. In bankruptcy cases, a "stalking horse" is selected to prevent a low-ball offer from winning the bankrupt company's assets.

The paper company and its investment banker, SSG Capital Advisors LLC, expects other interested buyers will participate in the auction, which has been tentatively scheduled for Nov. 10. Per the purchase agreement, if the bankruptcy court accepts a "higher or better" offer than Reich Brothers' opening $5 million bid for the mill's assets, Reich Brothers will receive a $175,000 breakup fee.

Federal Bankruptcy Judge Peter G. Cary was expected to consider the purchase agreement and bid procedures at a hearing Friday morning in Portland.

At the time of its bankruptcy, Lincoln Paper owed more than $10 million to more than 200 creditors, according to court documents. The mill is still operating as it works through the bankruptcy proceedings. Because the bankruptcy court's responsibility is to liquidate assets and return as much as it can to creditors, there's no promise that it will continue to operate as a paper mill after it's purchased at auction. If Reich Brothers is the ultimate purchaser of the mill, it could turn around and market the mill to other paper companies or sell the machinery for scrap.


Related Articles:

Powered by Bondware
News Publishing Software

The browser you are using is outdated!

You may not be getting all you can out of your browsing experience
and may be open to security risks!

Consider upgrading to the latest version of your browser or choose on below: