Flambeau River Papers announced May 8 filing Chapter 128 status, a Wisconsin bankruptcy alternative that protects the business from past debts while pursuing the sale of its assets as an operating business.
According to a company press release, a “receiver” or trustee will be named through the circuit court system and given authorization to continue to run business operations while a buyer is sought.
FRP Vice President of Operations Aaron Johnson said Wednesday afternoon an active sales process is in the works but could not give more detail at this time. He said there will be a timeframe for prospective buyers to visit the mill and complete assessment of the company’s assets. Johnson said Chapter 128 will allow a buyer to purchase the assets of the company debt free while also allowing the company to remain open.
“We intend to run as long as we can until we can find a buyer,” Johnson said in an email.
The mill will also make major changes to its paper production line over the next 60 days by shutting down the #1 paper machine and consolidating its most profitable paper grades to the #2 machine, which will have an average output of 75 tons of product per day.
The pulp mill operation will remain at full production and the wet lap pulp sales are set to increase, according to Johnson.
The existing employee base is expected to remain in place for at least the next 60 days. FRP currently employs 187 people.
The mill shut down its bulk production #3 paper machine in January 2018. That shut down involved the layoff of 82 employees.
“After this time, we plan to continue production by maximizing our pulping operation and balancing our supply of products with our customers’ demand,” said CEO Butch Johnson in a press release. “While FRP has made significant progress over the last several months, the softening paper markets make this the best option to continue operations while maximizing employment levels in Park Falls. A smaller, but more focused FRP should enhance our ability to find the right buyer.”