Gateway interim financing approved

Posted: Tuesday, April 10, 2001

KETCHIKAN (AP) -- U.S. Bankruptcy Judge Donald MacDonald has approved a $2.5 million interim operations loan from the Ketchikan Gateway Borough to Gateway Forest Products.

The decision came after a brief hearing Friday in Anchorage.

Gateway's major financial backer, Foothill Capital of California, had filed opposition to the loan on Thursday, but went along with it at Friday's hearing.

Foothill attorney Randye Soref said her client was very concerned and would be back in court if problems arose.

Joan Travestino, representing Gateway's unsecured creditors, said her clients would ask MacDonald to interrupt the Chapter 11 reorganization process if they felt Gateway was veering off its budget and reducing the value of assets.

The hearing included some discussion of potential timber supply problems in the wake of halt to timber operations on the Tongass National Forest after a recent court ruling.

U.S. Forest Service attorney Jim Barkley told the judge that timber supply could be a problem for Gateway.

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