Smart Papers granted court OK of indemnification claims settlement

By Caroline Salls

Pittsburgh, Dec. 19 - Smart Papers, LLC obtained court approval of a settlement agreement that resolves indemnification claims disputes with Fraser Papers, Inc. in connection with the company's September asset sale, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the motion, Fraser alleges that it made or will make payments to third parties under the guarantees of Smart Papers debtor PF Papers' obligations under assigned contracts.

Smart Papers said it objected to the indemnification claims on Dec. 1.

Under the settlement agreement, Fraser will have a general unsecured claim of at least $9.21 million but no more than $9.96 million.

In addition, Fraser will have a $450,000 other secured claim in connection with a log-lien claim, and Fraser agreed to support Smart Papers' plan of reorganization.

Smart Papers, a Hamilton, Ohio-based paper manufacturer, supplier and marketer, filed for bankruptcy on March 21, 2006. Its Chapter 11 case number is 06-10269.

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