CARTHAGE — A Pennsylvania company has agreed to pay nearly $10 million to acquire the assets of Carthage Specialty Paperboard, according to documents filed Friday in U.S. Bankruptcy Court, Syracuse.
Ox Industries, Hanover, Pa., under subsidiary companies Carthage Paper Limited LLC and Carthage Real Estate Investments LLC, acquired the Champion Street papermaker by entering the higher of two bids Thursday at a bankruptcy auction.
According to court documents, Human Capital Investments, Starbuck, Wash., submitted a $8,894,000 bid through its subsidiary, Long Falls Paperboard LLC. Human Capital had previously told local officials it intended to invest $15 million toward plant upgrades.
However, Ox Industries submitted a $9,949,000 bid in the form of $4 million cash at closing and the assumption of about $6 million in debt owed to Key Bank. In addition, Ox Industries’s bid allowed Carthage Specialty to retain any money it may be due from the state Worker’s Compensation Board, which could total more than $600,000.
Human Capital then revised its bid, also agreeing to forego the $600,000 possibly due from the state and providing an additional $1 million cash at closing.
Carthage Specialty, in consultation with Key Bank, the creditors’ committee and the bankruptcy trustee, asked Human Capital to “provide appropriate evidence of its financial wherewithal to support its increased bid,” court documents state.
Documents show that, after several hours of delay, Human Capital was “able to produce some evidence” that a Canadian individual with whom it had been working to secure funding “might” be willing to provide the funding, although the company did not have any formal agreement with the individual to do so.
“However, the evidence provided did not establish to a reasonable level of certainty the availability of funds and the binding nature of the relationship between Long Falls and its purported Canadian sponsor,” documents state.
Based on concerns about Human Capital’s ability to perform, it was determined that Ox Industries’s bid represented the better offer.
Judge Margaret Cangilos-Ruiz approved the sale of Carthage Specialty to Ox Industries Friday. The company owns two companies that make paper-based products: Ox Paperboard and Ox Paper Tube and Core. It manufactures its products at eight plants in Pennsylvania, Massachusetts, West Virginia, North Carolina, Illinois and Texas.
In a related transaction Friday, the Lewis County Industrial Development Agency closed on its purchase of a building previously owned by Carthage Specialty on Route 26 just north of Lowville. The IDA paid $800,000 for what is called the Climax building, a 170,000-square-foot structure on 13 acres of land, most of which is paved.
The IDA hopes to attract multiple businesses to the location. Currently, Carthage Specialty leases a large space there and a second company rents 80,000 square feet for storage.
The IDA used money totaling $1.1 million provided it by the Board of Legislators in 2016 and 2017 to make the purchase.
Times staff writer Julie Abbass contributed to this report.