Orchids Paper bid procedures approved; auction set for June 27

By Sarah Lizee

Olympia, Wash., May 20 – Orchids Paper Products Co. obtained court approval of the bid procedures for the potential sale of substantially all of its assets through an option agreement with pre-bankruptcy secured lender Orchids Investment LLC, according to an order filed Monday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, if the option is exercised, Orchids Investment would purchase the assets in exchange for a credit bid of roughly $175 million against Orchids Paper’s pre-bankruptcy secured credit facility, plus other consideration.

Orchids Investment is indirectly owned by a fund affiliated with Black Diamond Capital Management, LLC and Brant Paper Investment Co. LLC. The purchase agreement will be subject to the receipt of higher and better offers through a court-supervised auction process.

If Orchids Investment is not ultimately the winning bidder, Orchids Paper will pay it a $5.25 million break-up fee and reimburse up to $2 million of its sale-related expenses.

The initial overbid amount will be $7.75 million. Subsequent overbids must be in minimum increments of $500,000.

Competing bids are due by June 24, and an auction will be held on June 27. A sale hearing is set for July 1.

Orchids, a Brentwood, Tenn.-based maker of consumer tissue products, filed for bankruptcy on April 1. The Chapter 11 case number is 19-10729.

© 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.