AMERICAN PAPER GROUP Company must pick lead bidder by Dec. 13

An Indiana company says it wants to join negotiations to buy a Boardman envelope maker.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- American Paper Group has until Dec. 13 to declare a lead bidder in its effort to sell the company.
The date was set in court Tuesday as negotiations with a Missouri company continue. American Paper announced three weeks ago that it had a letter of intent to sell its operations to MWM Dexter, which prints church bulletins.
Meanwhile, another company has expressed interest in buying the Boardman company, which is the country's largest maker of church envelopes.
Michael Gallo, a Youngstown attorney representing Our Sunday Visitor of Indiana, asked at a hearing in U.S. Bankruptcy Court that the company be given time to enter negotiations to be declared a lead bidder.
Judge William Bodoh said he wasn't concerned with who the lead bidder is, only that the process is fair.
Gallo said he has arranged for Our Sunday Visitor, which publishes a Catholic newspaper and church envelopes, to begin talks with American Paper and its advisers.
Local jobs
The jobs of 350 hourly and salaried workers at plants on Southern Boulevard and McClurg Road are at stake. American Paper officials say they expect any new buyer to keep operations in Boardman and retain all employees except senior management.
Gaining the status of lead bidder, also called a "stalking horse" bidder, would give a company the right to a break-up fee of $350,000 if it isn't successful in buying the company. Judge Bodoh approved that fee as part of a motion by American Paper to set Dec. 13 as a deadline for reaching a purchase agreement with a lead bidder.
MWM Dexter said in court documents last month that it offered $16 million, including $13 million in cash.
Houlihan Lokey Howard & amp; Zukin Capital, American Paper's investment banker, selected that as the best offer after a sale negotiation process that included seven other companies' submitting bids.
Charlie Reardon, vice president with the banking firm, wouldn't disclose what issues still are being discussed between MWM Dexter and American Paper.
Bidding process
If a lead bidder is picked by Dec. 13, other companies can make bids until Jan. 6. If there are other bids, an auction will be Jan. 8 by American Paper and its law firm, and the highest bid will be submitted for court approval Jan. 9.
American Paper officials said they were unable to sell the company outside bankruptcy court. The November filing for bankruptcy protection allows the buyer to acquire American Paper without leases for closed plants in Virginia and Arizona or the company's debt obligations.
American Paper is owned by a New York investment company.
shilling@vindy.com