Delaware court holds hearing on the bid and a related objection.
Georgia-based SP Newsprint, which has been in bankruptcy protection since late 2011, will go before a bankruptcy court Sept. 4, 2012. The newsprint company filed for bankruptcy in Delaware, where it was incorporated, in November 2011. The court, which is scheduled to take up a bid from G.E. Capital to purchase SP’s mills in Georgia and Oregon and a federal objection arising from that bid at a hearing scheduled for Sept. 4
According to report in the News Register of McMinnville, Ore., G.E. Capital, SP Newsprint’s largest creditor, has offered to purchase SP’s assets for $145 million. Under the proposed plan, GE.. Capital would create a limited liability corporation called SPN Acquisition Co. LLC that would purchase the two mills.
One sticking point is how the federal Pension Benefit Guaranty Corp. (PBGC), SP Newsprint’s largest unsecured creditor, would be affected by the deal. PBGC says the move would result in the federal government inheriting $76 million in pension claims.
The federal pension agency says SP has two defined-benefit plans in place at the mills, one for union workers and one for nonunion workers, according to the News Register. It told the court the secured debtors backing the proposal “apparently intend to abandon (both) SP pension plans after selling all of their operating assets to the purchaser.”