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Bankruptcy trustee announces winning bid for Ponderay; mill to reportedly produce OCC

USK, Wash. (From news reports) -- Pending approval from the bankruptcy court, the former Ponderay Newsprint Mill will be reopened as a corrugated cardboard paper production facility, according to court filings sent from Chapter 7 Trustee John D. Munding. Allrise Capital had the winning bid, in the amount of $18,100,000.

"I am informed that Allrise will be restarting paper mill operations, with an aim to repurpose selected portions of the paper mill into an Old, Corrugated Cardboard (OCC) paper production facility. In summary, an OCC facility would produce cardboard materials used in packaging, manufacturing, e-commerce, shipping, and other industries," Munding wrote in the filing. "Allrise also has a strong interest in building and managing high-tech data centers for cloud computing operations. Allrise is committed to employing personnel to operate the paper mill facility as soon as possible."

Three entities submitted qualifying bids: PPL Acquisition Group, the Kalispel Tribe of Indians and Allrise. All three participated in the auction process and bidding procedure, which commenced via email on Monday, April 19, and continued through Friday. The live auction was held Friday via Zoom and in person. In attendance were each of the bidders, counsel for the bidders, Chris Bell of NAI Black, counsel and representatives of the Pend Oreille PUD, and counsel for secured creditor American Agricredit, interim mill manager Todd Behrend, and Munding.

The bidding took an hour and a half and there were approximately 60 rounds.

PLL dropped out of the bidding at the start of the live auction Friday. The Kalispel Tribe concluded its bidding at $17,500,000. Allrise made the last bid of the day at $18,100,000. Both entities were then required to provide Munding with a two-page letter by Wednesday, April 28, explaining why their bid was the "highest and best bid."

On Tuesday, April 27, Munding received a letter from Allrise, and on Wednesday, April 28, he received a series of letters from the Pend Oreille County board of commissioners, the city of Newport and the Pend Oreille County Economic Development Council, all of which supported Allrise's bid. The tribe did not submit a letter and informed Munding Wednesday that they were not seeking acceptance of their bid.

A hearing was set for 11 a.m. Thursday, April 29, before the United States Bankruptcy Court, Eastern District of Washington for final approval.

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