-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 JZwJmNe83G2DtrgF/BbOHVnL54eQpwd6CGlq9uOz8UMbX6bpOEieHUmQZjJFvswb
 cHL3vCAp0ffAQcjVrsJWdw==

<SEC-DOCUMENT>0000919574-08-010550.txt : 20081224
<SEC-HEADER>0000919574-08-010550.hdr.sgml : 20081224
<ACCEPTANCE-DATETIME>20081224145920
ACCESSION NUMBER:		0000919574-08-010550
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20081222
FILED AS OF DATE:		20081224
DATE AS OF CHANGE:		20081224

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			GUTFLEISH RONALD E
		CENTRAL INDEX KEY:			0001305978

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-33494
		FILM NUMBER:		081270274

	BUSINESS ADDRESS:	
		BUSINESS PHONE:		914-250-1000

	MAIL ADDRESS:	
		STREET 1:		C/O ELM RIDGE CAPITAL MANAGEMENT, LLC
		STREET 2:		3 WEST MAIN STREET, 3RD FLOOR
		CITY:			IRVINGTON
		STATE:			NY
		ZIP:			10533

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KAPSTONE PAPER & PACKAGING CORP
		CENTRAL INDEX KEY:			0001325281
		STANDARD INDUSTRIAL CLASSIFICATION:	PAPER MILLS [2621]
		IRS NUMBER:				202699372
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		C/O STONE-KAPLAN INVESTMENTS, LLC
		STREET 2:		ONE NORTHFIELD PLAZA, SUITE 480
		CITY:			NORTHFIELD
		STATE:			IL
		ZIP:			60093
		BUSINESS PHONE:		847-441-0929

	MAIL ADDRESS:	
		STREET 1:		C/O STONE-KAPLAN INVESTMENTS, LLC,
		STREET 2:		ONE NORTHFIELD PLAZA, SUITE 480
		CITY:			NORTHFIELD
		STATE:			IL
		ZIP:			60093

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	KapStone Paper & Packaging CORP
		DATE OF NAME CHANGE:	20070104

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Stone Arcade Acquisition CORP
		DATE OF NAME CHANGE:	20050428

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			ELM RIDGE CAPITAL MANAGEMENT LLC
		CENTRAL INDEX KEY:			0001166219
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-33494
		FILM NUMBER:		081270275

	BUSINESS ADDRESS:	
		STREET 1:		3 WEST MAIN STREET
		STREET 2:		3RD FLOOR
		CITY:			IRVINGTON
		STATE:			NY
		ZIP:			10533
		BUSINESS PHONE:		(914) 250-1000

	MAIL ADDRESS:	
		STREET 1:		3 WEST MAIN STREET
		STREET 2:		3RD FLOOR
		CITY:			IRVINGTON
		STATE:			NY
		ZIP:			10533
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>p950684_ex.xml
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0303</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2008-12-22</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001325281</issuerCik>
        <issuerName>KAPSTONE PAPER &amp; PACKAGING CORP</issuerName>
        <issuerTradingSymbol>KPPC</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001166219</rptOwnerCik>
            <rptOwnerName>ELM RIDGE CAPITAL MANAGEMENT LLC</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>3 WEST MAIN STREET</rptOwnerStreet1>
            <rptOwnerStreet2>3RD FLOOR</rptOwnerStreet2>
            <rptOwnerCity>IRVINGTON</rptOwnerCity>
            <rptOwnerState>NY</rptOwnerState>
            <rptOwnerZipCode>10533</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001305978</rptOwnerCik>
            <rptOwnerName>GUTFLEISH RONALD E</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>C/O ELM RIDGE CAPITAL MANAGEMENT, LLC</rptOwnerStreet1>
            <rptOwnerStreet2>3 WEST MAIN STREET, 3RD FLOOR</rptOwnerStreet2>
            <rptOwnerCity>IRVINGTON</rptOwnerCity>
            <rptOwnerState>NY</rptOwnerState>
            <rptOwnerZipCode>10533</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Warrants</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>5</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2008-12-22</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>P</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>205000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>.05</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2008-12-24</value>
            </exerciseDate>
            <expirationDate>
                <value>2009-08-15</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>205000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>5300680</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>Footnote</value>
                    <footnoteId id="F1"/>
                </natureOfOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Ronald Gutfleish is the managing member of two limited liability companies, which each manage one or more private investment
 funds that hold the Issuer's shares. The Reporting Persons disclaim beneficial ownership of these shares except to the
 extent of their pecuniary interest therein. This report shall not be deemed an admission that the Reporting Person is the
 beneficial owner of the reported securities for purposes of Section 16 of the Securities Exchange Act of 1934, as amended,
 or for any other purpose.</footnote>
    </footnotes>

    <remarks>(+) Each of the Reporting Persons disclaim beneficial ownership of the reported securities except to the extent of its or his
 pecuniary interest therein and this report shall not be deemed an admission that such Reporting Person is the beneficial
 owner of the securities for purposes of Section 16 of the Securities Exchange Act of 1934, as amended or for any other
 purpose. The Reporting Persons affirmatively disclaim being a &quot;group&quot; for purposes of Section 16 of the Securities Exchange
 Act of 1934, as amended.</remarks>

    <ownerSignature>
        <signatureName>Elm Ridge Capital Management, LLC (+), By: /s/ Ronald E. Gutfleish</signatureName>
        <signatureDate>2008-12-24</signatureDate>
    </ownerSignature>

    <ownerSignature>
        <signatureName>/s/ Ronald E. Gutfleish</signatureName>
        <signatureDate>2008-12-24</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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