Marcal Paper Mills, Inc. files plan of reorganization; secures $60 million commitment from Apollo Capital Management, L.P. to spur restructuring

Jun 26, 2007. /Lesprom Network/. Marcal Paper Mills, Inc., one of the nation's best known manufacturers and distributors of bath tissue, kitchen towels, napkins and facial tissue, announced on June 25, 2007 that the company has filed its proposed plan of reorganization with the United States Bankruptcy Court for the district of New Jersey. The company also announced that it has secured a $60 million commitment from Apollo Capital Management, L.P. This investment is a key component of the company's restructuring efforts. "This is an important and positive step forward for the company, and we are pleased that all of the parties were able to work together to formalize this plan of reorganization. We appreciate the confidence that the parties have shown in the company, our management team, our employees and our business strategy," said company chairman and CEO Nicholas Marcalus. "I am particularly pleased that, under the plan, the Marcalus family will partner with Apollo to allow Marcal to reach new heights." "The plan underscores the unwavering commitment of our valued customers, suppliers and employees, who continue to bring tremendous passion and dedication to their work. We expect that the company will successfully emerge from Chapter 11 in September. In the interim, we remain focused on providing superior service to our customers, strengthening our core businesses, and solidifying our position in the marketplace," added Mr. Marcalus. As part of the plan, members of the Marcalus family and Apollo Capital Management will together invest more than $11.5 million, plus other forms of consideration, to acquire and hold 100% of the capital stock of a new holding company, which in turn will own 100% of the outstanding shares of a reorganized Marcal Paper Mills. "Apollo is pleased to enter into this partnership with the Marcalus family. We are highly supportive of management's strategic plan focused on further developing its reputation as a strong consumer brand and strengthening its commitment as a partner to its customers and vendors," said Mathew Constantino, a partner with Apollo. The company simultaneously filed a disclosure statement that explains the details of the proposed plan. The company will request that a hearing on the adequacy of the disclosure statement and related procedures to solicit votes in favor of the plan be scheduled by the Bankruptcy Court for July 13, 2007. Marcal, founded in 1932, is a privately-held, fourth generation family business. It employs over 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The company produces over 160 000 tonnes of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue, distributed to retail outlets for home consumption and to distributors for away-from-home use in hotels, restaurants, hospitals, offices and factories.