Smart Papers requests court OK for $100,000 reserve to pay fees of possible replacement DIP lenders

By Caroline Salls

Pittsburgh, April 10 - Smart Papers, LLC requested court approval to establish a $100,000 reserve to pay fees and expenses to prospective replacement debtor-in-possession financing lenders, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the motion, under its current DIP request, lender Wachovia Bank set strict post-bankruptcy deadlines in connection with the sale and/or discontinuation of Smart Papers' operations in Ohio, Wisconsin and Illinois.

The company said the deadlines imposed by Wachovia are making it difficult to focus on stabilizing its business, so it is looking for replacement DIP financing "in order to relieve some of the strict requirements associated with Wachovia's loans."

Smart Papers said it will not pay more than $50,000 from the reserve to any one prospective lender.

In addition, if the bankruptcy court approves a DIP agreement with one of the prospective lenders, the total amount of that DIP commitment would be reduced by the amount of all reserve payments to that lender.

A hearing is scheduled for April 19.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.