PORT TOWNSEND – The 729 unsecured creditors in Port Townsend Paper Corp.’s Chapter 11 bankruptcy protection reorganization plan have until Monday to vote for or against the reorganization plan.
The ballots are coming in “at a rate of 95 percent in favor of approving the plan,” said Mark Northrup, Seattle attorney for the unsecured creditors committee.
Many of the unsecured creditors – which include businesses across the North Olympic Peninsula – are being offered 5 to 10 cents on the dollar.
It is the secured creditors who are behind that decision, Northrup said.
“Nobody is happy about that, but the fact is No. 1 that the secured creditors in this case control everything,” Northrup said.
“They control how much money is to be paid to the creditors.”
The company, which filed for bankruptcy protection in January, is on track to emerge from Chapter 11 during the third quarter of 2007, said John Begley, chief executive officer of the company.
The mill in Port Townsend employs about 310 people and is the largest private employer in Jefferson County.
The company’s disclosure statement to the court shows that Port Townsend Paper executives are scheduled to be paid under their existing contracts, including $75,000 to Begley, plus $6,000 for his employment contract.
“Secured creditors agreed to pay the money amount and to put the money up,” Northrup said.
“Secured creditors” are those funding the company: the CIT Group, primary lenders and a group of bondholders.
“Unsecured creditors” are everyone else.
