Fibermark, Book Cellar declare bankruptcy

Vermont Business Magazine, May 01, 2004

FiberMark Inc, with 215 workers in Brattleboro, filed for chapter 11 bankruptcy protection on March 31 citing a loss in sales. It reported sales were down $30 million last year to $214 million. Based in Brattleboro, FiberMark is a leader in the area of specialty-fiber-based materials for industrial and consumer needs internationally; the company has 11 facilities in the eastern United States, Europe, and Hong Kong.

FiberMark announced that it would file voluntary petitions for the reorganization of the company and its US operations under chapter 11 of the US Bankruptcy Code. This does not include the company's subsidiaries in Germany and the United Kingdom that are legally separate and independently funded entities which are financially stable. In regards to the filing entities, FiberMark listed combined assets of $329.6 million and combined liabilities of $405.7 million.

The company said operations in Vermont would continue as usual and no layoffs were planned.

Chairman and chief executive of FiberMark, Alex Kwader, explained that since 2001 the company "felt the effects of a weak economy and of a prolonged recession in most of our key markets, even as our operations in Germany, and the UK have continued to perform well. These adverse conditions have been further exacerbated over the past two years by the burden of acquisition-related debt and a number of operational issues, including production inefficiencies related to the consolidation of manufacturing facilities, structural sales declines due to business divestitures, instances of product obsolescence and downgrading by customers to lower-valued materials."

Berenson & Company is acting as FiberMark's financial adviser regarding the reorganization of the company, Skadden, Arps, Slate, Meagher & Flo, LLP is acting as the legal adviser.

Products produced by FiberMark include filter media for transportation and vacuum cleaner bags, base materials for specialty tapes, electrical and graphic arts applications, Wallpaper, building materials and sandpaper, and cover/decorative materials for office and school supplies, publishing, printing, and premium packaging. The company was formed in Brattleboro in 1989, has more than 1,500 employees worldwide, including more than 900 in the United States. Meanwhile, The Book Cellar, the venerable book retailer on Main Street in Brattleboro founded in 1948, filed for chapter 7 bankruptcy in April. Calls to the store at press time were neither answered nor messages returned. Chapter 7 typically results in the liquidation of assets.