PORT TOWNSEND – A U.S. Bankruptcy Court judge approved Port Townsend Paper Corp.’s plan to pay back creditors during a hearing in Seattle on Wednesday.
The plan makes $1.35 million available to general unsecured creditors and allows those creditors who are owed $2,000 or less to receive the full amount.
The disclosure statement outlining the plan will be sent to creditors next week.
They will have until Aug. 6 to vote on the plan.
John Begley, Port Townsend Paper Corp. president and chief executive officer, said the plan puts the company – with 310 workers, Jefferson County’s largest private employer – on track to emerge from bankruptcy protection proceedings “by the end of August with an improved balance sheet and enhanced liquidity,” in a prepared statement on Wednesday.
Mark Northrup, attorney for Seattle’s Graham & Dunn – who represents a committee for 724 unsecured creditors – said Wednesday that he is satisfied with the plan.
More than 65 of those creditors are based in Port Angeles, Port Townsend, Port Hadlock, Quilcene, Sequim, Carlsborg, Forks and Neah Bay.
“The way the plan is drafted now, it’s in the best interest for the creditors to vote to approve the plan as it stands,” Northrup said Wednesday.
“Our analysis shows that this will mean that 284 of the 724 unsecured creditors will receive full payments on their claims.
“Lots of the smallest creditors are going to get paid very well.”
Unsecured creditors who are owed more than $2,000 can chose to take that amount and cut their losses.
Some of the larger unsecured creditors who don’t quality for priority status would receive 5 cents on the dollar, Northrup said.
