Manistique Papers files paperwork with bankruptcy court to enter final phase of financial reorganization, with process to complete by March 2012, says Manistique, Michigan, paper mill is back at near full production capacity

MANISTIQUE, Michigan , December 8, 2011 (press release) – On November 21, 2011, Manistique Papers, Inc. (“MPI”) filed papers with the United States Bankruptcy Court for the District of Delaware to enter its final planned phase of financial reorganization. This filing formally initiated the process of selling the mill as an operating going concern to a new equity holder with an appropriate debt structure. The actual process commenced this week. It is anticipated that the process will be complete by March 2012.

MPI filed for Chapter 11 reorganization after its previous lender unexpectedly ceased funding the company’s operations. MPI took this action in order to achieve a cost and debt structure that is industry competitive and assures its long-term viability and ability to continue to be North America's premier producer of 100% recycled fiber content printing, writing and converting papers.

With the strong support of its new lenders, mBank and the Michigan Economic Development Corporation, it recommenced operations over two months ago. It is now operating at near full production capacity. Moreover, it has been developing new paper grades to provide a profitable supplement to its traditional newsprint and commercial printing market. It has also benefited from a significant drop in the price of its recycled paper raw material costs.

According to General Manager Jon Johnson: “This is an exciting time at MPI. We are back at near full production capacity and we are able to offer a more varied product line. Once the reorganization is finalized, we will have completed the transition to a sustainable structure to operate for many years to come.”

The formal legal process involves a sale of the fully operational mill in March 2012. This is keeping in line with standard practices and procedures in Bankruptcy to accomplish reorganization.

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