Newspaper article The Florida Times Union

Bankruptcy Claim Filed against Durango

Newspaper article The Florida Times Union

Bankruptcy Claim Filed against Durango

Article excerpt

Byline: Gordon Jackson, Times-Union staff writer

ST. MARYS -- Durango-Georgia Paper Co. employees may have drawn their last paychecks.

The company announced yesterday its attorneys are investigating reports of an involuntary bankruptcy claim filed by creditors against the company. Such a move would freeze company assets to ensure at least partial payment of money owed by the company to vendors and other creditors.

Camden County Attorney Brent Green said he checked with the U.S. District Court in Savannah yesterday and a claim has been filed against the company by creditors to force the company, one of Camden County's largest employers since 1941, into Chapter 7 bankruptcy.

The St. Marys paper mill is scheduled to close Nov. 15, putting about 900 workers out of a job.

While the lawsuit may guarantee creditors will get some of the money owed to them by Durango-Georgia, a forced bankruptcy could also mean employees who were scheduled to receive paychecks through Nov. 15 may not draw a check Friday.

Herb Baez, president of Durango-Georgia, said yesterday he hasn't been served any paperwork notifying the company of the involuntary bankruptcy claim, "but I'm certain something has happened."

"I will have to consult with our attorneys to see how we proceed further," Baez said. "We will have to evaluate the bankruptcy petition."

Baez said his company has the money to make payroll this week and he will make every effort to meet payroll unless he's legally prevented from doing so.

"Bankruptcy was something we hoped we could postpone as long as we possibly could," Baez said. "I'm not surprised, but disappointed, yes."

Baez said the company does not have the money to pay vendors "because we're insolvent."

"That's why we shut down," he said.

Sidney Howell, a Durango employee and union trustee, said the news wasn't unexpected. …

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