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Published on 9/10/2019 in the Prospect News Distressed Debt Daily.

Orchids Paper plan extension approved despite creditors’ objection

By Caroline Salls

Pittsburgh, Sept. 10 – Orchids Paper Products Co. obtained an extension of its exclusive periods for filing and soliciting votes on a Chapter 11 plan, according to an order filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

Orchids Paper’s exclusive plan-filing period was extended by 90 days through Oct. 28 and the solicitation period through Dec. 30.

Although its asset sale had not yet closed, the company said in the extension motion filed in July that it has begun the process of formulating, negotiating and drafting a plan of liquidation.

“Considering the progress made, coupled with the debtors’ willingness to work cooperatively with the [official committee of unsecured creditors], Orchids Investment, LLC, and other parties in interest, it is reasonable and appropriate for the debtors to be granted additional time to negotiate and finalize a Chapter 11 plan of liquidation,” the motion said.

Last week, the company’s official committee of unsecured creditors objected to the exclusivity extension, saying it believes that “given the current posture of these Chapter 11 cases,” the Orchids Paper debtors should be required to file a plan within seven days of a hearing on the motion for approval of a settlement between the committee, Orchids Investment and Ankura Trust Co., LLC, or by Sept. 17.

If no plan is filed by that date, the committee said exclusivity should be terminated on Sept. 17 so the creditor group can file a plan of liquidation for the Orchids Paper cases.

According to the objection, the company has drafted a plan, and the committee has provided comments on that plan, with the only open issues from the committee’s perspective being the scope of proposed third-party releases and preservation of potential claims against Orchids Paper’s officers and directors.

“At this stage of these Chapter 11 cases, there is no reason to further delay the filing of a plan and there is no cause to extend exclusivity as requested by the debtors,” the committee said.

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


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