Court extends deadline for bids in Manistique Papers bankruptcy case
The timeline for a possible sale of Manistique Papers Inc. has received another extension from the U.S. Bankruptcy Court in Wilmington, Del. On Friday, Feb. 24, Judge Kevin J. Carey issued a scheduling order that included new deadlines for the bid process.
The Manistique based paper producer, which filed for bankruptcy protection on Aug. 5, 2011, now has until March 16 to obtain a so-called “stalking horse bid,” according to the court order.
Provided a bidder comes forward, a hearing will be held on March 22 to approve the bid, followed by a final bid deadline on April 5.
If there are no objections, an auction could begin April 6, with a sale of the mill closing 10 days later, on April 16 or later, depending on the complexities of the transfer.
Following a 11th hour deal to prevent the immediate liquidation of MPI last August, the mill’s management and its workforce of 130 have been working to find a buyer – a process that has included improvements in operational efficiencies that could attract a potential purchaser.
MPI General Manager Jon Johnson said those efforts have attracted two prospects, both of whom car- ried out an extensive investigation of the purchase but need more time to complete the environmental and financial due diligence necessary to feel comfortable submitting a bid.
According to Johnson, the primary delay centers around a review of environmental exposure from prior mill ownership. Johnson said they have been diligently working to secure data from the state of Michigan and the U.S. Environmental Protection Agency so a bidder can determine their exposure, if any.
The extension granted Feb. 24 will allow that process to take place.
While there are no bids in hand yet, Johnson said, he traveled to Chicago Tuesday to meet with a potential buyer. Additionally four other interested parties have done due diligence on the operation and have received the necessary information to submit a bid should there be an interest.
In a statement released to mill employees last week, Johnson said he was not surprised by the delay, considering the volume of information needed for review, plus the added complexity of working through the bankruptcy process.
MPI TIMELINE REVIEW
Aug. 5: Manistique Papers Inc. announces that it is shutting down, ceasing production and filing for Chapter 11 bankruptcy protection
Aug. 12: The Royal Bank of Scotland (RBS) seeks to convert the Chapter 11 filing to a Chapter 7 bankruptcy, which would allow the mill and all its assets to be liquidat-ed.
Aug. 24: mBank and the Michigan Strategic Fund of the Michigan Economic Development Corporation purchase loans from RBS and provide a debtor-in-possession line of credit to fund mill operations and prevent the liquidation of MPI assets.
Sept. 19: 45 days after the shut-down was announced, mill employees are called back to work and production resumes.
Feb. 24: Bid deadline extended by U.S. Bankruptcy Court.