Carthage Specialty Paperboard Files For BankruptcyPosted: Updated:
Carthage Specialty Paperboard has decided to file for Chapter 11 bankruptcy, saying it's "facing an acute cash flow shortage." That means layoffs are possible.
Officials with the West Carthage mill summoned workers to a meeting that was called for 4 p.m. Wednesday. On the way in, many workers said they didn't know what to expect.
The company said the meeting was called to inform employees that a deal to sell the business unexpectedly fell apart, that it decided to file for bankruptcy and file a WARN Notice.
WARN stands for Worker Adjustment and Retraining Notification and is issued to alert workers to pending layoffs or a plant closure.
The company said Chapter 11 bankruptcy will give it "some breathing space to continue to pursue a sale." Officials said the company is continuing discussions with potential buyers and is also pursuing a proposal for a management buy-out.
"It is the Company’s expectation that a deal with management or another buyer will be reached and the Company can reconfigure and continue operations," the company said in a prepared statement.
Based on legal advice, the Company has issued a WARN notice to its employees in the event operations are not able to continue.
CSP currently employs 80 workers.
Spokesperson Michael Lambert said layoffs are possible, but the company is doing everything it can to avoid them.
Lambert says CSP hopes to get its employees back to work on March 11.
Last Friday, union officials told 7 News the mill planned to lay off workers for a week because of a lack of available fiber, which is the raw material the mill needs to make its product.
On Wednesday, company officials said they're hopeful those employees will be back on the job on March 11.
Company officials say they'll continue to talk with other interested buyers and that they're even looking at a plan that would allow current managers to buy the company's assets and take over operations.
Carthage Specialty Paperboard is owned by DeltaPoint Capital Management, a Rochester-based private equity investment firm that also owned the now-defunct Climax Manufacturing in Lowville.
Climax abruptly closed its doors in April 2016.