Union feels 'stress' as SMART gets new owner
Deal with Connecticut firm contingent on ruling by bankruptcy judge next week.
By Chris Dumond
Staff Writer
HAMILTON — A Connecticut-based hedge fund group will take over SMART Papers if a federal bankruptcy judge approves the deal Monday.
The papermaker, which employs about 450 workers in Hamilton, was set to be sold at auction Tuesday after nearly five months of bankruptcy. According to papers filed in court Wednesday, investment group Plainfield Asset Management circumvented that auction by striking a deal to take over about $40 million of SMART’s debt.
If a judge approves the deal, Plainfield would take control of the company while reorganizing it under Chapter 11 bankruptcy law protections from other creditors. The reorganization plan is to be filed with the court by Sept. 6.
While the terms also stipulate a yearlong extension of SMART’s union contract under terms similar to those that expired in June, that did little to quell uncertainty among workers and in the converting center in West Chicago, Ill.
As of the 3 p.m. shift change, workers in both cities said there was no official word of the deal from management.
“These people are still under stress,” United Steelworkers 1967 President Al Williamson said. “All they hear is rumors and rumors and they’re worried.”
Williamson said Plainfield representatives have asked to meet with the 360-member union in the next 10 days. Williamson said that the union will have something to say about those contract terms.
“People here are still losing hours and they’re still losing money,” he said. “I don’t think anyone wants to work under those terms.”
As of Wednesday afternoon, Williamson said he knew nothing of the group nor its plans. Plainfield was not one of the two groups that toured the B Street mill and met with union leaders earlier this year, he said.
Based in Greenwich, Conn., Plainfield was founded in early 2005 by former D.E. Shaw & Co. managing director Max Holmes. The group manages more than $1 billion in investment capital, according to its Web site.
Representatives declined comment Wednesday.
Other terms of the takeover include $5 million in interim financing for SMART to be followed by $5 million for the reorganized company. They also include a payment plan for $2 million now owed to International Paper.
Contact this reporter at (513) 820-2025 or cdumond@coxohio.com.
