NewPage Receives Approval of First Day Motions
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NewPage Corp., Miamisburg, Ohio, USA, reports that it received approval from the U.S. Bankruptcy Court for the District of Delaware on all of the First Day Motions related to its voluntary Chapter 11 restructuring. The remaining motions (dealing with certain professionals) will be scheduled for a hearing at a later date. These approvals give the company the authority to continue to conduct its business as usual without interruption in U.S. employee wages and benefits programs or customer programs, among other stakeholder protections.
NewPage Group Inc. and certain of its U.S. subsidiaries filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code on September 7. Separately, the company's Canadian subsidiary, NewPage Port Hawkesbury Corp., commenced proceedings before the Supreme Court of Nova Scotia under the Companies' Creditors Arrangement Act of Canada (CCAA).
Among the First Day Motions granted, the company received interim approval of its $600 million Debtor in Possession (DIP) financing committed by JPMorgan Chase Bank, Barclays Bank, and Wells Fargo Capital Finance. These facilities help ensure the company has adequate liquidity to continue to operate and compete successfully while it works with its creditors and other stakeholders to complete a Chapter 11 plan for its U.S. operations.
Additionally, the company emphasized that, following approval of the motions:
- It has authority to continue its pre-existing customer programs without interruption. The company fully intends to deliver the same high level of quality and service its customers expect both during and after the restructuring
- It has authority to continue its existing employee wage and benefit programs, including expense reimbursement, vacation, sick leave and holiday pay, as well as retirement and savings plans in the normal course. The company believes that protecting employees is integral to its future success
- It has received approval to use cash collateral and to continue its current cash management system for operations.
NewPage previously stated that it fully intends to pay suppliers for all goods and services delivered on or after the September 7, 2011, filing date. Supplier claims for goods and services provided before the filings are typically dealt with as part of the Chapter 11 plan. The company says it values and looks forward to continuing its relationships with its suppliers.
"Securing court approval of our First Day Motions was a critical first step in our court-supervised restructuring process," said George F. Martin, president and CEO of NewPage. "We believe the intended balance sheet restructuring will enable us to fully realize the benefits of our prior operational improvements and make continued investments in the business. Building upon the consistency and exceptional service for which NewPage has been known, we will continue to create quality paper that is in high demand from our customers."
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