Newark gets court approval of DIP financing order, first-day motions

By Jennifer Lanning Drey

Portland, Ore., June 15 - The Newark Group, Inc. received court approval of its debtor-in-possession financing order, allowing it access to its DIP loans, according to a company news release.

Newark subsequently closed on two DIP loans, a $50 million revolver and a $110 million term loan led by ORIX Finance. Both loans have funded, according to the release.

The company also received court approval of its 11 first-day motions.

As previously reported, Newark made a pre-packaged Chapter 11 bankruptcy filing on June 9.

The plan confirmation hearing is scheduled for July 30. The company said it expects to exit bankruptcy shortly after the hearing.

"We are pleased to have the support of our noteholders and lenders as we move forward to strengthen our balance sheet and position the company for profitability," Robert Mullen, Newark's chief financial officer, said in the release.

The company said its two impaired creditor classes and the two impaired equity interests all voted more than 90% in favor of the plan.

Newark Group is a Cranford, N.J.-based producer of paper products from recycled materials. The Chapter 11 case number is 10-27694.

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