Klausner Lumber One – Seeks 2-Month Extension of Exclusive Plan Filing Period until February 28, 2021; WARN Act Settlement and Plan Expected Soon

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December 23, 2020 – The Debtor filed a second motion seeking an order extending the periods during which it has an exclusive right to file a Plan and solicit acceptances thereof, through and including February 28, 2021 and May 1, 2021, respectively [Docket No. 630]. Absent the requested relief, the Plan filing and solicitation periods are scheduled to expire on December 28, 2020 and March 1, 2021, respectively.

Since the closing of the sale of substantially all its assets to Binder Beteiligungs AG, acting through Timber One Acquisition Holdings LLC, the extension motion states that the "Debtor has focused on winding down the Debtor’s remaining operations and affairs, as well as the further expeditious administration of its chapter 11 case."

Among other things, the Debtor said it has been negotiating a settlement with WARN Act Plaintiffs, with a motion to approve a settlement with those plaintiffs expected "within the next couple of weeks." Additionally, the Debtor said it, together with the Official Committee of Unsecured Creditors appointed in its case, are finalizing a Plan, which should be filed within the same timeframe as the expected settlement motion.

The extension motion explains, “Notably, since the Petition Date, the Debtor has, among other things: (a) procured post-petition financing; (b) prepared and filed its Schedules of Assets and Liabilities and Statement of Financial Affairs; (c) conducted a sale process to find a higher and better bidder for the sale of substantially all of the Debtor’s assets; (d) obtained Court orders to retain critical professionals…establish[ed] procedures for the interim compensation of professionals; and (e) negotiated extensively with other parties in interest; (f) entered into mediation and further negotiations with the WARN Act plaintiffs. Additionally, the Debtor is dealing with various litigations — both before this Court and in other jurisdictions — to which the Debtor is a party. 

Second, the Debtor submits that no party in interest is ready to submit a plan for this chapter 11 case, and the Debtor should have sufficient time to administer their claims to enable them to craft a chapter 11 plan that will be best for the Debtor’s estate and its creditors. The extension request is reasonable and is consistent with the efficient prosecution of the chapter 11 cases in that it will provide the Debtor with additional time to consider such issues, finalize negotiating and drafting a plan and solicit acceptances thereof. Consequently, the relief requested herein is necessary. Allowing the Exclusive Periods to lapse now would defeat the very purpose of section 1121 and deprive the Debtor and its creditors of the benefit of a meaningful and reasonable opportunity to negotiate and confirm a consensual plan.

Third, creditors will not be harmed by extending exclusivity at this time. This is the Debtor’s second motion to extend the Exclusive Periods. The Debtor intends to use the extended Exclusive Periods to, among other things, continue its analysis of claims, continue negotiations on a proposed chapter 11 plan and disclosure statement and continue negotiations with WARN Act plaintiffs on a resolution of their adversary proceeding, which would be implemented through the Plan. If the Debtor can complete confirmation in the time allotted by this exclusivity extension, they will confirm the Plan within a year after the Petition Date.”

A hearing on the motion is scheduled for January 19, 2021, with objections due by January 11, 2021.

About the Debtor

The Debtor is a subsidiary of Klausner Trading USA, Inc. (KTU) which was established in 2006 and operates as distribution company with headquarters located in Myrtle Beach, SC. The company is the sole distributor of products from Klausner US worldwide and Europe sold in North America.

Klausner Lumber One (KL1) and Klausner Lumber Two (KL2) are the two state-of-the-art Southern Yellow Pine (SYP) sawmills currently under construction in the USA. Klausner Lumber One (KL1) is located in Suwanee County, Florida near the town of Live Oak and Klausner Lumber Two (KL2) in North Carolina in an area located in Halifax County near the town of Enfield.

The Klausner Group was founded in 1991, when Austrian Fritz Klausner built his mill in former East Germany as a green field investment. The company and sales management office, Klausner Trading International, is headquartered in Oberndorf, Austria, in close vicinity to the Klausner family’s first sawmill founded in 1918 (closed in 1996).

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