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Veneer plants closes while owners seek logs

Posted: Wednesday, January 02, 2002

KETCHIKAN (AP) -- The Gateway Forest Products veneer mill shut down on Dec. 22 and will remain closed until about Jan. 14 due to a lack of logs.

Gateway's owners are asking U.S. Bankruptcy Court Judge Donald MacDonald for permission to loan the company $300,000 for the purpose of buying new logs for the company's Ward Cove veneer mill. A hearing on that request has yet to be scheduled, said Gateway's bankruptcy expert Stephen Hartung.

The company has been operating on a $2.5 million loan obtained in April from the Ketchikan Gateway Borough but has nearly run out of cash at this time, according to recently filed court documents.

Gateway filed for Chapter 11 bankruptcy protection from creditors in February and is scheduled for a financial reorganization confirmation hearing Jan. 9. The company hopes to raise cash and pay in advance for a supply of Canadian logs it would use to continue mill operations after Jan. 14. The supply of logs would last about one month with the mill operating at its current one-shift level, Hartung said.

If the company's proposed reorganization plan is adopted, it would have enough new financing to hire a second shift, he said.



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