Chapter 11 bankruptcy and vendors
This letter is in response to recent articles carried by the Daily Press concerning NewPage coming out of Chapter 11 bankruptcy and how wonderful that is for the community. I totally agree that it is wonderful for the community that NewPage is on more stable financial footing. The loss of NewPage would have a negative economic effect on many businesses. However, what about the rest of the story?
When NewPage filed Chapter 11 there were many vendors who supplied services and/or goods to NewPage that were left with huge financial losses of their own because NewPage did not pay for a service or product NewPage had ordered and now were not obligated to pay for. It is my understanding that in some instances an order was given to a vendor only a couple of weeks before Chapter 11 was filed. New Page knew that they were having financial problems and the Chapter 11 process had been started. However, they chose to take these services and goods knowing that the vendor would not be paid.
I am one of those vendors. Before providing the service that NewPage hired us to do we talked to a NewPage representative specifically asking about the possibility of not getting paid. We were assured there was no problem. NewPage always paid at least 90 120 days after the billing, and does not pay any interest. Around the 90 day point we started getting “legalized” letters from the NewPage lawyers in Connecticut explaining that New Page was in Chapter 11. We could not contact them concerning the money they owed us and our bill would not be paid. The only way we could contest this decision was to appear personally in a Delaware court.
After 29 years in business we have worked hard to maintain an excellent financial footing. We have always paid our bills and treated our customers and vendors honestly and fairly. As any business person knows it is easy to be profitable if one does not pay your bills and obligations as NewPage has done.
Again, I am happy for the community that New Page seems to be on good financial footing. However I felt the community needed to hear the “rest of the story” and many local vendors lost a lot of money to get NewPage on that good financial footing.