A United States Bankruptcy Court judge in Delaware this week approved a revised settlement between Halifax County and Klausner II, a proposed sawmill in the Enfield area which never began operations.
The order signed by Judge Karen B. Owens still gives the court jurisdiction to the settlement, the document filed in electronic records says.
In the order Owens said the court found the relief sought in a motion and a notice of revised settlement “is in the best interests of the debtor’s estate, its creditors, and other parties in interest” and that the “legal and factual basis set forth in the motion and notice of revised settlement establish just cause for the relief granted herein.”
The order also says any objections to the requested have been withdrawn or overruled and after due deliberation there was sufficient cause to approve the order. “The debtor’s rights in the settlement and the recovery of property therein and the rights of Carolina Sawmills, L.P. and the official committee of unsecured creditors shall be in all instances governed by the stipulation regarding motion to approve county settlement separately approved by this court.”
In a statement this morning Halifax County Attorney Glynn Rollins said, “We are very pleased that the various parties in this bankruptcy case have reached a mediated settlement which allows a Section 363 bid sale process to move forward.”
Rollins said both the county and the debtor “are working diligently to move along on a very aggressive schedule. Under the terms of this agreement, the county will recoup a significant portion of its initial expenditures on this project.
“We will also have a binding commitment by the eventual purchaser of the facility for substantial new job creation. We look forward to a successful completion.”
Previous court documents pertaining to the revised settlement note the county will have to reconvey property to Klausner pursuant to any order approving a sale.
Under terms of the revised settlement there remains an $11 million strike price but instead of the county receiving $4.5 million, it would receive $4.6 million. The first $1.5 million would be paid to the debtor.
In the event Klausner and the county are unable to sell the property for the strike price the county would be free to sell the property on its own terms and Klausner would be free to sell the personal property on its own terms.
The documents note, with some exceptions, the county acknowledges that it has no right, title, or interest in the scheduled personal property.
Klausner was announced by former Governor Beverly Perdue in 2012 as an economic development project which would bring 350 jobs to Halifax County and represented what was to be a $130 million investment.
The motion by Klausner seeking approval of the settlement said the company was to be one of the first new sawmills built in the United States for some time.
It was to use European technology “that would result in efficiencies of operations and production, and far greater utilization and less waste of raw materials,” and if successful would have brought a competitive advantage over domestic lumber mills.
Construction of the sawmill began in 2014.
Several setbacks and delays occurred during construction over the next several years, and the debtor’s sawmill never became fully operational, which caused a drain on liquidity, previous documents reviewed in the case show.