PORT TOWNSEND – A U.S. Bankruptcy Court judge on Tuesday confirmed Port Townsend Paper Corp.’s reorganization plan in the final hearing of Chapter 11 bankruptcy protection proceedings.
As a group, the 729 unsecured creditors will receive about 37 percent of the money they were owed – between $21 million and $22 million – when the company filed for bankruptcy protection in January.
But some of those creditors will receive as little as 5 percent of their claim.
Port Townsend Paper Corp. – a paper mill which employs about 310 people and is the largest private employer in Jefferson County – will emerge from Chapter 11 on Aug. 27, and will pay its unsecured creditors within five business days.
“I think it’s a successful Chapter 11 case,” said Mark Northrup, Seattle attorney for the unsecured creditors committee.
“It didn’t last very long. It’s been over and done with in eight months.”
Receiving 37 percent of the total claim is rather high compared to the national average of bankruptcy protection cases, said Northrup, who is with the law firm, Graham and Dunn.
“The problem is, not everyone gets 37 percent,” he said.
“Some get 5 percent and some get 100 percent of their claims.”
Northrup said 95 percent of the unsecured creditors voted to accept the plan and the payment disbursements.
The plan will pay 100 percent to those with claims amounting to $2,000 or less and give those with higher claims the option of accepting $2,000 or receiving 5 percent to 10 percent of their claim.
“The great benefit is the company is still alive and still available to supply jobs to local employees,” Northrup said.
