KETCHIKAN (AP) -- Gateway Forest Products has filed a reorganization plan in U.S. Bankruptcy Court that would isolate the company's veneer mill from its other affairs.
The company, which has been under bankruptcy protection from creditors since February, filed its plan in Anchorage Friday.
Gateway Veneer, a new limited liability company, would purchase the veneer mill's assets for $20 million, according to the reorganization plan and an accompanying disclosure statement.
Gateway Forest Products would receive $12 million cash, along with the equivalent of 1.5 million common shares and 6.5 million preferred shares. Isolating the veneer mill and its assets from the larger company makes it easier to obtain new financing and investors, said Steven Hartung, Gateway's chief executive officer for bankruptcy.
Under the reorganization plan, new investors in Gateway Veneer would include Key Bank and the Alaska Industrial Development and Export Authority, backed by a loan guarantee from the U.S. Department of Agriculture Rural Development, the Ketchikan Daily News reported.
Gateway Forest Products and Gateway Veneer would be managed by a five-member board of directors who would serve without compensation, according to the disclosure statement.
Both companies would have two officers.
The veneer mill would employ 68 people. It would not operate the Ketchikan Sawmill, which was closed in March due to poor market conditions, according to the documents.
The reorganization plan will be addressed at an Oct. 28 hearing in U.S. Bankruptcy Court.
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