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Gorham Paper and Tissue, White Mountain Tissue enter into asset purchase agreement

by Tara Giles
Sports reporter - Coos County Democrat and Berlin Reporter
November 12, 2020
GORHAM — In a statement, released on Nov. 5, Gorham Paper and Tissue, LLC and White Mountain Tissue, LLC and along with Gorham, the "Companies" revealed that they have entered into an asset purchase agreement with an affiliate of Behrens Investment Group to acquire substantially all of the Companies' assets for $8.75 million in cash, in addition to the assumption of several million dollars in estimated liabilities, including the assumption of certain of the Companies' tax, environmental liabilities and employee obligations, and specific bank debt. The Companies and Behrens intend to close the sale transaction as part of the chapter 11 filings of the Companies.

Mayor Paul Grenier shared his thoughts on the transaction.

He said, "I met with the investment group last week and they are interested in the continued operation of the facility. They have had engineers at the facility over the past four months looking at every aspect of the building's operation and equipment needed to really turn the facility around."

The Mayor added, "Much of it is just investing in modernizing the energy delivery systems and removing wasteful buildings. They want to right size the footprint of the operation so that they can, over time, invest in converting products now being made on the machines."

The statement went on to read, "Under Section 363 of the U.S. Bankruptcy Code, Behrens will serve as the stalking horse bidder in the proposed auction in the Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). Behrens agreed to provide, subject to Bankruptcy Court authorization, partially subordinated debtor-in-possession financing, referred to as "DIP Financing," that will provide a secured term loan credit facility to fund the Companies' working capital needs throughout its chapter 11 cases."

The Bank of New Hampshire, one of the company's lenders and the Business Finance Authority of the State of New Hampshire, issued a statement: "We commend Behrens for its interest in the Gorham mill. We are optimistic that [Behrens'] efforts will have a positive impact on the State of New Hampshire, employees and the local community. Dick Arnold, Chief Executive Officer of the Companies, described the efforts by Behrens as 'comprehensive' and as 'very collaborative.' Further, the material, existing secured parties, which include affiliates of, and/or funds managed or owned by Lynn Tilton, Patriarch Partners, LLC, and the Zohar Funds, support the acquisition, the terms of the APA, and the DIP Financing provided to the Companies by Behrens."

The companies will file a motion seeking the Bankruptcy Court's approval of bid procedures in connection with the sale to Behrens. When the Bankruptcy Court has approved the bid procedures, the Companies will begin the formal bidding process.

The companies will continue to operate as "debtors-in-possession" under the Bankruptcy Court's jurisdiction.

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