Marcal Paper Files Reorganization Plan

Marcal Paper Mills, Inc. has filed its proposed Plan of Reorganization with the U.S. Bankruptcy Court for the District of New Jersey. The company also announced that it has secured a $60 million commitment from Apollo Capital Management, L.P, which will help the company to emerge from bankruptcy protection.

"This is an important and positive step forward for the company, and we are pleased that all of the parties were able to work together to formalize this Plan of Reorganization. We appreciate the confidence that the parties have shown in the company, our management team, our employees and our business strategy," said Nichcolas Marcalus, Marcal’s chairman and CEO.

In announcing the restructuring plan Marcal also reported that it expects to emerge from bankruptcy protection by this coming September.

Under the Plan, these creditors are projected to receive 52 cents on the dollar on their unsecured claims. As part of the Plan, members of the Marcalus family and Apollo Capital Management will together invest more than $11.5 million, plus other forms of consideration, to acquire and hold 100 percent of the capital stock of a new holding company, which in turn will own 100 percent of the outstanding shares of a reorganized Marcal Paper Mills.

The company will request that a hearing on the adequacy of the Disclosure Statement and related procedures to solicit votes in favor of the Plan be scheduled by the Bankruptcy Court for July 13, 2007.