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Management Side
Appvion files for bankruptcy protection, looks to reorganize

APPLETON, Wisconsin (From news reports) -- Appvion has filed a Chapter 11 petition in the U.S. Bankruptcy Court for the District of Delaware.

The filing was made to restructure debt and position the business to continue operations now and in the long-term, according to a statement from the company.

It comes on the heels of another Fox Cities paper company, Appleton Coated in Combined Locks, struggling under heavy, unsustainable debt. Appleton Coated is in the process of being sold to Industrial Assets, a used equipment dealer. An Outagamie County judge has yet to finalize that sale.

According to Appvion's second quarter financial filing on July 2, it had debts of $445 million and assets of $378.4 million. Year-to-date net sales of $330.7 million were $23.4 million, or 6.6 percent, lower compared to the same period in 2016. The decline was mostly due to lower prices for thermal paper products and lower shipment volume.

Appvion is an employee-owned paper company headquartered at 825 E. Wisconsin Ave. Its workforce of 1,400 employees includes 820 in Appleton. Its other facilities are in Ohio and Pennsylvania.

It produces thermal, carbonless, security, inkjet, digital specialty and colored papers.

A company release sent late Sunday night said Appvion "obtained a commitment for $85 million in new debtor-in-possession financing from a group of its first lien lenders. Subject to bankruptcy court approval, this (debtor-in-possession) financing, combined with cash generated by the company, is expected to provide more than adequate liquidity to support ongoing operations during the process."

"We thoroughly explored various alternatives to address our debt and have been engaged in constructive discussions with our lenders regarding sponsorship of a plan to delever (pay back debt) the company and enhance our liquidity," said Kevin Gilligan, chief executive officer.

"While those discussions are active and continuing, we determined that pursuing a restructuring through Chapter 11 is the best path forward for Appvion and our stakeholders. We believe this process will result in a sustainable capital structure for our business."

Initial motions include continued payment of employee wages and benefits.

Last month, Appvion announced it was closing and outsourcing its distribution center and warehouse in Appleton. The 62 workers at those two facilities will be laid off by Nov. 5.

"Some would have the opportunity to fill positions in the Appleton plant. The net loss will be about 27," said spokesman Bill Van Den Brandt.

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