PORT TOWNSEND – A hearing that would have informed unsecured creditors how much Port Townsend Paper Corp. will pay them was moved on Wednesday to May 15 in U.S. Bankruptcy Court, Western District of Washington, in Seattle.
Judge Samuel J. Steiner approved the motion Wednesday, court records show, resetting May 15 as the hearing date to approve the Port Townsend Paper bankruptcy protection disclosure statement.
Port Townsend Paper Corp. filed Jan. 29 for Chapter 11 bankruptcy protection for the Port Townsend kraft-paper producing mill – which employs about 310 people, making the company the largest private employer in Jefferson County.
The list of those who have filed a claim with the bankruptcy court includes more than 65 individuals, businesses, government agencies and nonprofit organizations in Port Angeles, Port Townsend, Port Hadlock, Quilcene, Sequim, Carlsborg, Forks and Neah Bay.
Mark Northrup of Seattle’s Graham & Dunn, who is the attorney for the unsecured creditors committee, said that on Wednesday the court approved final authority for Port Townsend Paper to continue its borrowing arrangement with its lenders.
“Secured creditors” in this case are the ones funding the company: the CIT Group, primary lenders and a group of bondholders.
“Unsecured creditors” are everybody else, Northrup explained.
If enough of the company’s assets are left over after the secured creditors are paid, then unsecured creditors will be paid based upon the proportion of the claim relative to the total unsecured claims.
Timothy Leybold, chief financial officer for Port Townsend Paper, said the new hearing date would give the company more time to file its disclosure statement.
He said as part of the order, the court appointed the firm of Alvarez and Marsal as Port Townsend Paper’s restructuring officer.
