 COMBINED LOCKS, Wisconsin (From news reports) -- U.S. Sen. Tammy Baldwin sent a letter to William S. Demchak, PNC Bank chairman, president and CEO, asking about the bank's role in the demise of Appleton Coated in Combined Locks.
"While restoring jobs as quickly as possible is the first priority, I am deeply troubled by what I have learned about the events that led to Appleton Coated's closure. There appeared to be multiple options to keep the plant open, yet PNC Bank refused them," she said in a statement.
"I am deeply concerned that PNC Bank appears to have recklessly pursued short-term profit at the expense of Appleton Coated, its workers and their families," the Wisconsin Democrat wrote in her letter to Demchak. She included 15 questions on the bank's loan, actions and relationships.
Demchak could not be reached for comment.
"Appleton Coated entered receivership on Aug. 17, 2017, after PNC Bank abruptly called its loan and demanded full payment immediately. The demand was made in spite of the fact that Appleton Coated had not missed a loan payment," Baldwin wrote to him.
Baldwin asked "by how much" the company missed its earnings target, why the bank chose to enforce a $50,000-a-day bank penalty for missing the target and how much the bank collected in penalties. She asked if the bank discouraged the company from filing for Chapter 11 bankruptcy protection and debtor-in-possession financing that would have allowed the mill to continue operating. She also asked if it received and rejected offers to buy out the loan.
Baldwin sought to determine if allegations of enforcement of $50,000-a-day penalties starting in July on the reported $11 million loan strained the company's finances and garnered an extra $3 million for the bank on top of what it would have earned on the loan.
The paper mill, which employed about 620 workers, went into receivership Aug. 17 and was sold Oct. 10 to Industrial Assets Corp. after a series of court hearings. The mill is currently idle, with minimal staff maintaining the facility.
Baldwin, who is running for re-election in 2018, praised Outagamie County Executive Tom Nelson for rallying to the cause of the company and its workers. Nelson filed an objection to the Appleton Coated sale in September and attended multiple court hearings.
Nelson saw Baldwin's letter and said it was particularly important to find out the answer to question No. 13, which asks if PNC has business relationships with other paper producers in the region.
"I believe they have a note on a facility nearby, in Wisconsin Rapids, which is a competitor," said Nelson.
U.S. Sen. Ron Johnson's office did not respond before deadline to inquiries about whether Johnson has received information on PNC Bank and Appleton Coated, or if Johnson has had any interactions with the bank or the paper company.
As part of the court settlement, Industrial Assets Corp., the mill's owner, is marketing the facility to potential buyers who could operate the mill as an ongoing concern. Despite showings in the first 30 days of the 90-day marketing period, no buyer has yet come forth, said Kyle Putzstruck, who is overseeing the mill for Industrial Assets.
"We are still actively searching for a partner," he said earlier. "We still feel there are positive signs out there."
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