NE Opco Inc., the largest closely held envelope maker in North America, won court approval to borrow as much as $60 million of a bankruptcy loan to help fund operations.
U.S. Bankruptcy Judge Christopher Sontchi indicated at a hearing today in Wilmington, Delaware, that he will approve the interim bankruptcy financing provided by Salus Capital Partners LLC, as agent for lenders, after minor changes are made to language in the agreement.
The funding “gives the company a fair opportunity to sell the assets, and maximize the value for the estate,” John Knight, an attorney for NE Opco with Richards Layton & Finger PA, told Sontchi. The company said in court papers the bankruptcy loan will allow it “to take out the first lien lenders’ debt in full.”
The company will seek court approval to borrow the final $7.5 million of the total $67.5 million package at a hearing set for July 1.
NE Opco, formerly known as National Envelope, sought bankruptcy protection yesterday for the second time as consumers increasingly opt for Internet-based communication over traditional mail.
The Frisco, Texas-based company listed as much as $500 million in both assets and liabilities in Chapter 11 filings.
NE Opco employs about 1,600 people, 600 fewer than in 2012, according to the filing. The envelope maker has eight manufacturing facilities and two distribution centers capable of producing 37 billion envelopes a year, giving it a 15 percent total share of the U.S envelope market.
The case is In re NE Opco Inc. 13-bk-11483. U.S. Bankruptcy Court, District of Delaware (Wilmington).
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