FiberMark reaches agreements to move forward on reorganization plan

By Ellen Chang

Houston, Jan. 25 - FiberMark, Inc. announced that several members of the creditors committee and the company's advisors have agreed on the corporate governance issues that had been a potential hurdle to the company's proposed restructuring.

Subject to documentation of the agreement, the company expects to move forward to seek confirmation of the current plan of reorganization on a new schedule to be requested from the bankruptcy court at the Jan. 27 hearing.

FiberMark said on Jan. 18 that it might have to withdraw its plan of reorganization because bondholder members of its creditors committee have so far been unable to agree on the proposed restructuring.

"A number of corporate governance issues" are the cause of the dispute, FiberMark said in a news release.

The bondholders had been unable to agree on corporate charter and by-law provisions related to shareholder rights, FiberMark said, noting that it has not been involved in the discussions. It added that if the major future shareholders had been unable to agree unanimously on differences from standard Delaware law then the plan of reorganization might not receive the votes required for bankruptcy court approval.

FiberMark, a Brattleboro, Vt., producer of specialty fiber-based materials, obtained bankruptcy court approval for its disclosure statement on Dec. 17, and the creditors had originally agreed to support that plan.

It filed for bankruptcy on March 30, 2004 in the U.S. Bankruptcy Court for the District of Vermont. Its Chapter 11 case number is 04-10463.

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