Executives at Appleton Papers Inc. are hoping bankruptcy court will free them from an agreement to buy pulp from Enron Corp.
The specialty papermaker had been relying on Enron for about 40 percent of its annual purchases of pulp, the raw ingredient in paper. Appleton Papers signed an agreement with the Houston energy and commodity trader in 1999 that expires at the end of 2003.
But when Enron's finances began unraveling in late 2001, pulp suppliers, including Georgia-Pacific Corp. and International Paper Co., refused to sell to Enron. Enron's deliveries of about $300,000 a month in pulp to Appleton Papers ceased in December.
Last month, Appleton Papers asked the federal bankruptcy court in New York overseeing the Enron case to release the papermaker from its agreement with Enron.
"We told the court that the Enron contract made sense only if we can count on long-term performance from Enron, which clearly we cannot," Doug Buth, Appleton Papers' chief executive officer, said in a conference call Thursday. The court is expected to address the matter Wednesday, Buth said. He said he was encouraged by favorable rulings on similar requests from other Enron customers.
With the court's approval, Appleton Papers would be free to arrange for more reliable supplies of pulp.