Enron Corp. is suing several newspaper publishers for defaulting on contracts to purchase newsprint. According to published reports several publishers signed multi-year agreements, called swaps, to protect against rising newsprint prices. The publishers terminated the contracts when Enron filed for bankruptcy protection.
Enron claims that a total of around $31 million is owed. The Chicago Tribune signed a seven-year agreement that was slated to run until December 2008. The deal required to purchase 25,000 metric tons of newsprint annually at a price of $605 per metric ton. However, at the present time the average price of newsprint is moving at around $450 per ton.
A pre-trial conference is scheduled for Sept. 19 9 in the U.S. Bankruptcy Court in New York.
Publishers terminated the contract when financial irregularities surfaced over Enron Corp.’s business. Before collapsing, Enron sought to build up its newsprint business through acquiring several newsprint mills in North America. The company had purchased the Garden State Newsprint mill in New Jersey, as well as a Daishowa mill, which it renamed Stradacona Paper, located in Quebec.Latest from Recycling Today
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