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prices of the major American pulp companies; a 3-percent discount
was commonly offered to purchasers of market pulp, and it did not
represent a special price or discount resulting from KKO's
interest in LRFP. These benefits to KKO were for the full term
of the Pulp Sales Agreement, and KKO’s discount applied in both
strong and weak markets. The Pulp Sales Agreement also provided
that either party could terminate the agreement only on 1-year’s
written notice given on or after July 1, 1999, in which case
termination would take effect at the end of 5 years from the date
of the notice. Pulp shipments for the period following the date
of the notice would be the same for the first 12 months and then
be reduced cumulatively.
The pulp mill commenced operations in 1984. In that year,
KKO purchased 2,555 tons of pulp from LRFP, and, in the next
year, KKO purchased 47,128 tons of pulp from LRFP. The purchased
pulp was an important source of supply to KKO. In 1986, the
markets improved, and LRFP began to develop new markets. In late
1986, the parties to the Pulp Sales Agreement agreed to suspend
the Pulp Sales Agreement for 1987, and, by mutual consent on
December 31, 1987, the parties to the Pulp Sales Agreement
terminated the agreement in toto.
In February 1988, Griffin notified GNN that it was going to
exercise its put. On January 2, 1989, Griffin did so, exercising
its right to sell all of its common and preferred stock in LRFP
on July 3, 1989, with an earnings date of May 31, 1989. LRFP’s
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