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FiberMark's proposed sale of plants get objection from U.S. trustee over commission
By Jeff Pines
Washington, June 4 - FiberMark Inc.'s proposed sale of three shuttered plants was objected to by the U.S. trustee because the company plans to pay commissions to its former chief financial officer, according to a Friday filing with the U.S. Bankruptcy Court for the District of Vermont.
The trustee objects to the involvement of Bruce Moore, the company's former CFO now working for FiberMark under a consulting contract, because he is acting as a real estate broker and brokers are professionals whose employment comes under the bankruptcy code.
The bankruptcy code requires "that professionals seeking compensation from Chapter 11 debtors be reviewed for actual and potential conflicts of interest," the trustee said.
Brattleboro, Vt.-based FiberMark wants to sell its 1.4-megawatt hydroelectric power plant and paper plant in West Springfield, Mass., a paper plant in Rochester, Mich. and a paper plant in Johnston, R.I. for a total of $4.6 million.
Moore was CFO from December 1990 to May 2003. In an earlier filing, FiberMark said he was closely involved in the company's sales and purchases of other paper plants and management believed he was the best person for the job of trying to sell the facilities.
FiberMark, which makes a variety of products from sandpaper to masking tape, agreed to pay Moore $100 per hour for up to 500 hours. In addition, their agreement calls for him to get a 7% commission if the gross price of all properties is greater than $4 million. It is asking the court to skip holding an auction since it believes there is little demand for the plants besides that of the purchasers.
A June 14 hearing is scheduled.
The company filed for bankruptcy on March 30. Its Chapter 11 case number is 04-10463.
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