Pope & Talbot to liquidate remaining assets

Pope & Talbot Inc. on Friday received approval to transition out of reorganization and begin liquidating its remaining mills, a worst-case scenario for the company's remaining employees who will likely lose their jobs.

U.S. Bankruptcy Court Judge Christopher S. Sontachi on Friday authorized the insolvent 160-year-old wood products company to move from Chapter 11 reorganization into Chapter 7 liquidation.

He put the company's remaining assets into the hands of a court-appointed trustee. Bloomberg News reported that attorney George Miller of Philadelphia has been appointed trustee by the U.S. Trustee, an arm of the U.S. Department of Justice.

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In a separate filing, Sontachi scheduled a May 13 auction of the company's pulp mill and plant in Halsey, Ore., south of Portland. The mill employs about 180.

The Halsey mill, along with two pulp mills in British Columbia that employ around 800 combined, were part of a $105.3 million sale to PT Pindo Deli that fell apart last week. PT Pindo Deli is a subsidiary of Asia Pulp and Paper, which is owned by Sinar Mas Group of Indonesia, Asia's largest paper producer.

For the past week the company has made preparations to idle the three mills. Company officials have said suitors have emerged for all three.

PT Pindo Deli, in a separate deal, had also agreed to buy Pope & Talbot's Fort St. James sawmill in British Columbia for $6 million. That deal has not closed.

A spokesman for Pope & Talbot could not be reached for comment.

Pope & Talbot (Pink Sheets: PTBT), filed the third-largest bankruptcy in state history in November after fighting a losing battle with the slumping housing market, a strengthening Canadian dollar, and high debt levels.

In order to secure an emergency $89 million loan, the company subsequently agreed to sell all of its assets by mid-February.

At the time of its bankruptcy, the company had eight mills, including the three pulp mills.

Deals for four of the company's mills have already closed.