Talk about the pot calling the kettle black: NewPage told a bankruptcy court this week it is reluctant to merge with Verso Paper because of its rival’s high risk of going bankrupt.
But it also revealed an even bigger reason to rebuff Verso’s advances: Rather than engaging in a good-faith effort to forge a union between North America’s two largest makers of magazine-quality paper, NewPage said, Verso’s owners are engaging in “tactics of holdup and delay” to weaken NewPage and hinder its emergence from bankruptcy protection.
NewPage’s bankruptcy case presents Verso “with both significant opportunities and risks,” an attorney representing holders of first-lien debt wrote to the bankruptcy court today.
“On the one hand, Verso’s market position will be greatly improved if Verso is able to acquire NewPage’s assets at fire-sale prices, or if the Debtors fail to successfully reorganize [NewPage],” Dennis F. Dunne wrote.
“On the other hand, Verso is significantly threatened by the possibility
Thursday, July 12, 2012
Tuesday, July 10, 2012
NewPage's Fraudulent Deals Started in 2007, Creditors Claim
Four years before it went into bankruptcy protection, NewPage Corp. was essentially structured as a giant scheme to defraud suppliers and other creditors for the benefit of its owners, a creditors committee charges.
The creditors committee wants the bankruptcy court to declare as “fraudulent transfers” the highly leveraged 2007 transactions that enabled NewPage to become North America’s largest producer of magazine-quality papers and the 2009 refinancing of that massive debt.
The Official Committee of Unsecured Creditors is also trying to claw back millions of dollars in “excessively high” management fees paid to leveraged buyout firm Cerberus, NewPage’s primary owner, and millions more in bills paid to two suppliers that are subsidiaries of Stora Enso, a European paper company that owns 20% of NewPage.
The U.S. Bankruptcy Court appointed the committee to advocate for the interests of companies that were left holding accounts receivable but no collateral when NewPage filed for Chapter 11 bankruptcy protection on Sept. 7, 2011. The committee consists of representatives of organizations that stand to lose millions of dollars resulting from NewPage’s insolvency, including the Pension Benefit Guaranty Corporation, Deutsche Bank, OMNOVA Solutions (a major supplier of specialty chemicals to the paper industry), and United Steelworkers.
NewPage’s owners have challenged whether the committee has the right to press its claims in bankruptcy court. The court has not ruled on that question yet.
Among the creditors’ claims are:
Destined to fail
NewPage’s 2007 acquisition of Stora’s North American paper mills left it “with a crippling amount of new debt, but without any new value to show for it. No new equity was injected whatsoever. The target Debtors [the various NewPage subsidiaries] simply had new owners. Hobbled by this
The creditors committee wants the bankruptcy court to declare as “fraudulent transfers” the highly leveraged 2007 transactions that enabled NewPage to become North America’s largest producer of magazine-quality papers and the 2009 refinancing of that massive debt.
The Official Committee of Unsecured Creditors is also trying to claw back millions of dollars in “excessively high” management fees paid to leveraged buyout firm Cerberus, NewPage’s primary owner, and millions more in bills paid to two suppliers that are subsidiaries of Stora Enso, a European paper company that owns 20% of NewPage.
The U.S. Bankruptcy Court appointed the committee to advocate for the interests of companies that were left holding accounts receivable but no collateral when NewPage filed for Chapter 11 bankruptcy protection on Sept. 7, 2011. The committee consists of representatives of organizations that stand to lose millions of dollars resulting from NewPage’s insolvency, including the Pension Benefit Guaranty Corporation, Deutsche Bank, OMNOVA Solutions (a major supplier of specialty chemicals to the paper industry), and United Steelworkers.
NewPage’s owners have challenged whether the committee has the right to press its claims in bankruptcy court. The court has not ruled on that question yet.
Among the creditors’ claims are:
Destined to fail
NewPage’s 2007 acquisition of Stora’s North American paper mills left it “with a crippling amount of new debt, but without any new value to show for it. No new equity was injected whatsoever. The target Debtors [the various NewPage subsidiaries] simply had new owners. Hobbled by this
Saturday, July 7, 2012
Postal Workers Are Putting Off Retirement
Note: PostalNews Blog has a different interpretation of the recent USPS employment statistics that is worth noting. It points out that thousands of employees have gone from part-time to full-time. The number of part-timers, meanwhile, is decreasing faster than the number of full-timers. So much for the goal of having a more flexible USPS workforce.
Talk of early-retirement incentives for U.S. Postal Service employees may have temporarily backfired: Career employees of the U.S. Postal Service have apparently been retiring in record low numbers
The number of full-time employees shrank by only 1.6% in the past year, according to a statistical report USPS released Friday. That’s a minuscule net attrition rate in an organization that is hardly hiring any new full-time employees, where half the employees are 50 or older, and where nearly half the employees are eligible to retire.
The net loss of only 8,141 full-timers between June 2011 and June 2012 is a far cry from the decrease of nearly 22,000 the previous year and more than 38,000 the year before that. The irony is that the Postal Service has placed increased emphasis on downsizing its workforce to cope with declining revenues.
The low attrition numbers back up what many USPS employees have been saying for more than a year: They are delaying retirement in hopes of bagging some incentive money.
Talk of early-retirement incentives for U.S. Postal Service employees may have temporarily backfired: Career employees of the U.S. Postal Service have apparently been retiring in record low numbers
The number of full-time employees shrank by only 1.6% in the past year, according to a statistical report USPS released Friday. That’s a minuscule net attrition rate in an organization that is hardly hiring any new full-time employees, where half the employees are 50 or older, and where nearly half the employees are eligible to retire.
The net loss of only 8,141 full-timers between June 2011 and June 2012 is a far cry from the decrease of nearly 22,000 the previous year and more than 38,000 the year before that. The irony is that the Postal Service has placed increased emphasis on downsizing its workforce to cope with declining revenues.
The low attrition numbers back up what many USPS employees have been saying for more than a year: They are delaying retirement in hopes of bagging some incentive money.
Wednesday, July 4, 2012
USPS' 'Safeguards' Have Been Running Amok For 3 Decades
The more things change at the U.S. Postal Service, the more they stay the same.
Consider this statement written 31 years ago by then-Postmaster General William F. Bolger:
"The main disadvantage of the Postal Service's present status is that the 'safeguards' that accompanied independence have tended to grow to the point that new fetters have been substituted in part for the former ones. The Postal Service continues to be overregulated, and its managers continue to have difficulty finding the authority to execute certain decisions that are necessary to modernize the service and operate the postal system efficiently."
Bolger's reference to "safeguards" came from a 1970 Congressional report that called for making the Post Office Department an independent agency, which happened the next year. Bolger quoted the committee as writing that the only way to fix the Post Office was "fundamental reform that puts complete responsibility in a single place, with appropriate safeguards. . . . Top management must be given authority, consistent with its responsibilities, to provide an efficient and economical postal system."
The overregulation of the U.S. Postal Service has become even more apparent and more damaging today. Congress demands that the agency break even yet hamstrings its efforts to reduce costs and mostly prevents it from building new sources of revenue. For too many Congress members, "appropriate safeguards" mean preventing any changes that would hurt anyone in their district regardless of the greater harm to mailers, employees, and the Postal Service from doing nothing.
Bolger's letter in answer to a questionnaire from the National Academy of Public Administration provides quite a lesson on the history and legal standing of USPS. I have posted the entire letter on Scribd.
Consider this statement written 31 years ago by then-Postmaster General William F. Bolger:
"The main disadvantage of the Postal Service's present status is that the 'safeguards' that accompanied independence have tended to grow to the point that new fetters have been substituted in part for the former ones. The Postal Service continues to be overregulated, and its managers continue to have difficulty finding the authority to execute certain decisions that are necessary to modernize the service and operate the postal system efficiently."
Bolger's reference to "safeguards" came from a 1970 Congressional report that called for making the Post Office Department an independent agency, which happened the next year. Bolger quoted the committee as writing that the only way to fix the Post Office was "fundamental reform that puts complete responsibility in a single place, with appropriate safeguards. . . . Top management must be given authority, consistent with its responsibilities, to provide an efficient and economical postal system."
The overregulation of the U.S. Postal Service has become even more apparent and more damaging today. Congress demands that the agency break even yet hamstrings its efforts to reduce costs and mostly prevents it from building new sources of revenue. For too many Congress members, "appropriate safeguards" mean preventing any changes that would hurt anyone in their district regardless of the greater harm to mailers, employees, and the Postal Service from doing nothing.
Bolger's letter in answer to a questionnaire from the National Academy of Public Administration provides quite a lesson on the history and legal standing of USPS. I have posted the entire letter on Scribd.
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