This is a voluntary debt consolidation and administration mechanism taking place in the Wisconsin Circuit Court system.
The proceeding is a state procedure which is similar to a federal US Chapter 11 bankruptcy which is commonly used by companies in financial difficulties in Wisconsin.
The company has announced that it will continue to operate in the ordinary course of business under the control of a receiver, but due to declining paper markets Flambeau will shut down one production line for paper in addition to the idling of one machine this winter.
A spokesperson for Flambeau has declared that a buyer is being sought for the company.
In the event that raw material deliveries from Flambeau will be reduced or terminated, Borregaard will supply North American customers from other manufacturing sites.
The book value of the intangible assets related to the acquisition of the Flambeau lignin business was USD 3,1 million as of 30 April 2019.
Borregaard acquired Flambeau`s lignin business in 2015 and entered into a long-term supply agreement for lignin raw material of approximately 40,000 tons per year. See stock exchange releases of 21 October and 3 November 2015.