8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
June 18, 2008

Wellman, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-10033	04-1671740
(State or other jurisdiction	(Commission File Number)	(IRS Employer Identification No.)
of incorporation)
1041 521 Corporate Center Drive
Fort Mill, South Carolina		29707
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (803) 835-2000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-99.01 Press Release dated June 18, 2008.

EX-99.02 Fifth Amendment to the Wellman, Inc. Credit Agreement dated February 26, 2008.

EX-99.03 Wellman, Inc.'s Unaudited Monthly Operating Statements for the month ended May 31, 2008.

Item 1.01. Entry into a Material Definitive Agreement.

     On June 18, 2008, Wellman Inc. (the “Company”) entered into the fifth amendment of its senior secured superpriority debtor in possession credit agreement dated February 26, 2008 (the “Credit Agreement”) among the Company and certain of its domestic subsidiaries, as borrowers, Deutsche Bank Securities Inc., as sole lead arranger and bookrunner, Deutsche Bank Trust Company Americas, as administrative agent and collateral agent, and the lenders that from time to time become party thereto. The default provisions in Section 9.1(i)(xvi) of the original Credit Agreement provide specified times to complete certain steps in a sales process. These were replaced with specified times to complete certain steps in a reorganization process. The time frames for the major steps are:

• File, with the Bankruptcy Court, by June 25, 2008, (i) a plan of reorganization, (ii) a disclosure statement and (iii) a commitment of at least $70 million to backstop a rights offering which is reasonably acceptable to the DIP lenders,

• Obtain an indicative commitment for exit financing by July 14, 2008,

• Obtain a fully underwritten commitment for exit financing by July 30, 2008,

• Obtain Bankruptcy Court approval of the disclosure statement by August 4, 2008,

• Obtain an order confirming the plan of reorganization by September 15, 2008, and

• Complete the plan of reorganization and exit bankruptcy by September 25, 2008.

The amendment also provides for a participation in the DIP by a second lien lender and for fees to be paid to both the DIP lenders and to the new participant in the DIP. For a description of the Credit Agreement and a copy thereof, please see the Company’s Current Report on Form 8-K dated February 26, 2008 filed with the Securities and Exchange Commission on March 4, 2008. A copy of the related press release is attached hereto as Exhibit 99.1 hereto. A complete copy of the amendment is attached as Exhibit 99.2.

Item 2.02. Results of Operations and Financial Condition.

     The information set forth in Item 7.01 below is incorporated by reference in this Item 2.02 as if fully set forth herein.

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

     David Styka, Chief Accounting Officer, announced his decision to leave the Company in the middle of July to pursue other opportunities outside of the Company.

Item 7.01. Regulation FD Disclosure.

     On June 19, 2008, the Company and certain of its subsidiaries (collectively, the “Debtors”) filed their unaudited consolidated Monthly Operating Statements for the month ended May 31, 2008 (the “Monthly Operating Statements”), with the United States Bankruptcy Court for the Southern District of New York (the “U.S. Bankruptcy Court”) in the matter of In re Wellman, Inc., et al., Case No. 08-10595 (SMB). Exhibit 99.3 to this Current Report on Form 8-K contains the unaudited consolidated Monthly Operating Statements as filed with the United States Bankruptcy Court.

     The Monthly Operating Statements are limited in scope, cover a limited time period, and have been prepared solely for the purpose of complying with the monthly reporting requirements of the U.S. Bankruptcy Court. The financial information in the Monthly Operating Statements are in a format required by the U.S. Bankruptcy Court and the Company’s Debtor-in-Possession credit agreement, is preliminary and unaudited and does not purport to show the financial statements of any of the Debtors in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Therefore, the Monthly Operating Statements may exclude items required by GAAP, such as certain reclassifications, eliminations, accruals, valuations and disclosure items. The Company cautions readers not to place undue reliance upon the Monthly Operating Statements. There can be no assurance that such information is complete and the Monthly Operating Statements may be subject to revision. The Monthly Operating Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

     These Monthly Operating Statements have been derived from the books and records of the Company. They, however, have not been subjected to procedures that would typically be applied to financial information presented in accordance with GAAP and, upon the application of such procedures, the Company believes that they could be subject to changes, and these changes could be material. The information furnished in the Monthly Operating Statements includes certain normal recurring adjustments but may not include all of the adjustments that would typically be made for quarterly financial statements in accordance with GAAP. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

     Access to documents filed with the U.S. Bankruptcy Court and other general information about the Chapter 11 cases are available at www.kccllc.net/wellman. The content of the foregoing website is not a part of this Report.

Limitation on Incorporation by Reference

     The Monthly Operating Statements are being furnished for information purposes only and are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”). Registration statements or other documents filed with the SEC shall not incorporate the Monthly Operating Statements or any other information set forth in this Report by reference, except as otherwise expressly stated in such filing. This Report will not be deemed an admission to the materiality of any information that is required to be disclosed solely by Regulation FD.

Forward-Looking Statements

     In addition to historical information, this Report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as “believe,” “intend”, “expect,” “anticipate,” “plan,” “may,” “will,” and similar expressions are intended to identify forward-looking statements. Such statements include, among others, those concerning the Company’s expected financial performance, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. These Statements are made as of the date of this Report based upon current expectations, and we undertake no obligation to update this information, whether as a result of new information, future developments or otherwise. These forward-looking statements involve certain risks and uncertainties, including, but not limited to: our substantial liquidity needs and liquidity pressure; our substantial indebtedness and its impact on our financial health and operations; risks associated with our indebtedness containing floating interest rate provisions and its effect on our financial health if rates rise significantly; our ability to obtain additional financing in the future; risks associated with claims not discharged in the Chapter 11 cases and their effect on our results of operations and profitability; risks associated with the transfers of our equity, or issuances of equity in connection with our reorganization and our ability to utilize our federal income tax net operating loss carry-forwards in the future; our dependence on our management and employees; the adverse effect of competition on our performance; reduced raw material margins; availability and cost of raw materials; reduced sales volumes; increase in costs; volumes of textile imports; prices and volumes of polyester staple fiber and PET resin imports; the financial condition of our customers; change in tax risks; environmental risks; natural disasters; regulatory changes; U.S., European, Asian and global economic conditions; work stoppages; levels of production capacity and profitable operations of assets; prices of competing products; acts of terrorism; and maintaining the operations of our existing production facilities. Actual results may differ materially from those expressed herein. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of our common stock.

Item 9.01. Financial Statements and Exhibits.

     (a) Not applicable.

     (b) Not applicable.

     (c) Exhibits

99.1	Press Release dated June 18, 2008.
99.2	Fifth Amendment to the Wellman, Inc. Credit Agreement dated February 26, 2008.
99.3	Wellman, Inc.’s Unaudited Monthly Operating Statements for the month ended May 31, 2008.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	Wellman, Inc.
June 19, 2008	/s/ Keith R. Phillips
	Keith R. Phillips
	Vice President, Chief Financial Officer and Treasurer

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EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release dated June 18, 2008.
99.2	Fifth Amendment to the Wellman, Inc. Credit Agreement dated February 26, 2008.
99.3	Wellman, Inc.’s Unaudited Monthly Operating Statements for the month ended May 31, 2008.

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EX-99.1

EXHIBIT 99.1

Contact: Michael Bermish
Investor Relations Officer
(803) 835-2238

FOR IMMEDIATE RELEASE

WELLMAN, INC. TO PURSUE PLAN OF REORGANIZATION

Fort Mill, SC, June 18, 2008 — Wellman, Inc. ([OTC]: WMANQ.OB) announced that the Company has completed an amendment to its DIP Agreement that will allow it to pursue a stand-alone plan of reorganization. The amended DIP Agreement requires that the Company adhere to the following timetable in completing its plan of reorganization:

• File, with the Bankruptcy Court, by June 25, 2008, (i) a plan of reorganization, (ii) a disclosure statement and (iii) a commitment of at least $70 million to backstop a rights offering which is reasonably acceptable to the DIP lenders,

• Obtain an indicative commitment for exit financing by July 14, 2008,

• Obtain a fully underwritten commitment for exit financing by July 30, 2008,

• Obtain Bankruptcy Court approval of the disclosure statement by August 4, 2008,

• Obtain an order confirming the plan of reorganization by September 15, 2008, and

• Complete the plan of reorganization and exit bankruptcy by September 25, 2008.

The Company has reached an understanding with the two largest holders of Wellman’s second-lien debt to backstop an $80 million rights offering. This commitment is expected to be finalized before June 25, 2008. The Company has also made significant progress on the other elements of the plan of reorganization; however, there can be no assurances that the Company will be able to complete the plan of reorganization.

Mark Ruday, Wellman’s Chief Executive Officer, stated, “We look forward to working with the backstop parties and our other stakeholders to complete the plan of reorganization and emerge from bankruptcy with a strong financial position. This will allow us to capture more profitable growth opportunities in PET resins as well as in our other businesses. We appreciate the time and effort invested by all of our stakeholders and look forward to working with them to maximize the value of the Company.”

Forward-Looking Statements

Statements contained in this release that are not historical facts, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as “believes,” “expects,” “anticipates,” and similar expressions are intended to identify forward-looking statements. These statements are made as of the date of this report based upon current expectations, and we undertake no obligation to update this information. These forward-looking statements involve certain risks and uncertainties, including, but not limited to: our substantial liquidity needs and liquidity pressure; our substantial indebtedness and its impact on our financial health and operations; risks associated with our indebtedness containing floating interest rate provisions and its effect on our financial health if rates rise significantly; our ability to obtain additional financing in the future; risks associated with claims not discharged in the Chapter 11 cases and their effect on our results of operations and profitability; risks associated with the transfers of our equity, or issuances of equity in connection with our reorganization and our ability to utilize our federal income tax net operating loss carry-forwards in the future; our dependence on our management and employees; the adverse effect of competition on our performance; reduced raw material margins; availability and cost of raw materials; reduced sales volumes; increase in costs; volumes of textile imports; prices and volumes of polyester staple fiber and PET resin imports; the financial condition of our customers; change in tax risks; environmental risks; natural disasters; regulatory changes; U.S., European, Asian and global economic conditions; work stoppages; levels of production capacity and profitable operations of assets; prices of competing products; acts of terrorism; and maintaining the operations of our existing production facilities. Actual results may differ materially from those expressed herein. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of our common stock. For a more complete description of the prominent risks and uncertainties inherent in our business, see our Form 10-K for the year ended December 31, 2007.

EX-99.2

EXHIBIT 99.2

FIFTH AMENDMENT TO CREDIT AGREEMENT

     This Fifth Amendment to Credit Agreement (this “Amendment”) is entered into as of June 18, 2008 by and among Wellman, Inc., a Delaware corporation (the “Funds Administrator”) and the other borrowers under the Credit Agreement party hereto, each as a debtor and debtor-in-possession (collectively, and together with the Funds Administrator, the “Borrowers”), Deutsche Bank Trust Company Americas, as Administrative Agent, and the other financial institutions party hereto.

RECITALS

     A. The Funds Administrator, the Borrowers, the Administrative Agent and the Lenders are party to that certain Credit Agreement dated as of February 26, 2008 (the “Credit Agreement”). Unless otherwise specified herein, capitalized terms used in this Amendment shall have the meanings ascribed to them by the Credit Agreement.

     B. The Funds Administrator, on behalf of itself and the Borrowers, the Administrative Agent and the undersigned Lenders wish to amend the Credit Agreement on the terms and conditions set forth below.

     Now, therefore, in consideration of the mutual execution hereof and other good and valuable consideration, the parties hereto agree as follows:

          1. Amendments to Credit Agreement. Upon the Effective Date (as defined herein):

     (a) Section 1.1 of the Credit Agreement shall be amended by

               (i) deleting the definition of “Financial Advisory Fee” appearing therein and replacing it with the following: ““Financial Advisory Fee” shall mean the fee payable by Wellman to Lazard in connection with either completing the Reorganization Plan or closing the Wellman Sale pursuant to the existing agreement of Wellman with Lazard previously delivered to the Agent in connection with filing the Chapter 11 Cases and as approved by the Bankruptcy Court.”;

               (ii) deleting the definition of “Reorganization Plan” appearing therein and replacing it with the following: ““Reorganization Plan” shall mean a plan of reorganization or liquidation in any of the Chapter 11 Cases in form and substance reasonably satisfactory to the Majority Lenders providing for either (a) the indefeasible repayment in full of the Obligations in cash upon the effective date (except for contingent, unliquidated Obligations) or (b) treatment of the Obligations in a manner acceptable to the Agent and the Lenders in their sole discretion.”; and

               (iii) deleting the definition of “Total Commitments” and replacing it with the following:

               ““Total Commitments” shall mean the aggregate of the Commitments of all the Lenders, which in the aggregate shall not exceed $200,000,000.”

               (v) deleting the definition of “Wellman Sale” appearing therein and replacing it with the following: ““Wellman Sale” shall mean the sale of all or substantially all of the assets of the Borrowers and their Subsidiaries pursuant to which the Obligations shall be paid in full in cash at closing pursuant to section 363 of the Bankruptcy Code.”

     (b) Section 9.1 of the Credit Agreement shall be amended by:

               (i) deleting Section (i)(xv) in its entirety and replacing it with the following:

          “(xv) The failure of the Borrowers (i) to have both (A) filed a Reorganization Plan and a disclosure statement relating thereto and (B) obtained a binding commitment without any due diligence or other similar contingencies in form and substance reasonably satisfactory to the Majority Lenders to backstop a rights offering or other similar commitment of not less than $70 million in connection with such Reorganization Plan, in each case by June 25, 2008, (ii) to have obtained an indicative commitment letter or letters to provide exit financing in form and substance reasonably satisfactory to the Majority Lenders by July 14, 2008, (iii) to have obtained with respect to such exit financing a binding, fully underwritten, commitment letter or letters which are not subject to syndication, due diligence, market material adverse effect and/or other contingencies other than the delivery of customary corporate and loan documentation or the occurrence of confirmation of a Reorganization Plan, to provide the exit financing and any other financial accommodations required to consummate the Reorganization Plan described in (i), above, in form, substance and amount reasonably satisfactory to the Majority Lenders by July 30, 2008, (iv) to have obtained entry of an order by the Bankruptcy Court, in form and substance reasonably satisfactory to the Majority Lenders, approving the disclosure statement described in (i), above, by August 4, 2008, (v) to have provided documentation in substantially final form relating to the rights offering, the exit financing and any other financial accommodations required to consummate the Reorganization Plan described in (i), above, in form and substance reasonably satisfactory to the Majority Lenders by August 22, 2008, (vi) to have obtained entry of an order by the Bankruptcy Court, in form and substance reasonably satisfactory to the Majority Lenders, confirming a Reorganization Plan by September 15, 2008 and (vii) to have caused to occur the Consummation Date by September 25, 2008; or”;

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               (ii) deleting Section (i)(xvi) in its entirety and replacing it with the following:

          “(xvi) The failure of Solus Alternative Asset Management or one of its affiliated funds (“Solus”) (i) on or before June 18, 2008, to have executed a last out participation agreement in the form attached as Exhibit A (the “Solus Participation Agreement”) to that certain Fifth Amendment to Credit Agreement among the Borrowers, Agent and Lenders dated June 18, 2008 and (ii) within one Business Day after receipt of the signature pages to the Solus Participation Agreement for Agent and each Lender, to have executed and delivered an irrevocable trade confirmation which will cause the $20 million payment required by the Solus Participation Agreement to be made to Agent for the ratable benefit of Lenders; or”;

               (iii) deleting Section (i)(xvii) in its entirety and replacing in lieu thereof “intentionally omitted; or”;

               (iv) deleting section(i)(xviii) in its entirety and replacing it with the following:

          “(xviii) The entry of an order in any of the Chapter 11 Cases confirming a chapter 11 plan which does not constitute a Reorganization Plan.”

     (c) Annex I of the Credit Agreement is hereby deemed modified by reducing the amount listed as the Commitment for each Lender by 1/9th of the amount thereof.

          2. Representations and Warranties of the Borrower. The Borrowers represent and warrant that:

          (a) The execution, delivery and performance by the Borrowers of this Amendment have been duly authorized by all necessary corporate action and that this Amendment is a legal, valid and binding obligation of the Borrowers enforceable against the Borrowers in accordance with its terms, except as the enforcement thereof may be subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally;

          (b) Each of the representations and warranties of the Borrowers contained in the Credit Agreement (treating this Amendment as a Loan Document for purposes thereof) is true and correct on and as of the date hereof as if made on the date hereof except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct on and as of such earlier date; and

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               (c) After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.

          3. Amendment Fee. Borrowers shall pay to the Agent, for the ratable benefit of the Lenders, a fee in the amount of .5% of the Total Commitments as of the date immediately prior to the date hereof (the “Amendment Fee”), which fee shall be fully earned on the Effective Date of this Amendment and due and payable in accordance with the terms hereof, shall be nonrefundable for any reason whatsoever and shall be in addition to any other fees, costs or expenses payable pursuant to the Credit Agreement, the Fee Letter or any other Loan Documents, including without limitation the fees payable under the joinder letter dated February 20, 2008. The Amendment Fee shall be paid to the Agent in two equal installments, with the first installment paid on the Effective Date of this Amendment and the second installment paid on the earlier to occur of the Facility Termination Date or the Consummation Date.

          4. Cooperation Covenant. The Borrowers hereby agree that, upon the occurrence of an Event of Default described in Section (i)(xv) of the Credit Agreement (as modified hereby), the Borrowers shall fully cooperate with Agent and Lenders in connection with any exercise of remedies by the Agent and Lenders, including without limitation the filing of a motion to sell the Borrowers’ assets pursuant to section 363 of the Bankruptcy Code, the filing of a Reorganization Plan, or the liquidation or other disposition of the Collateral, in each case on such terms and conditions as are requested by Agent and Lenders.

          5. Effective Date. This Amendment shall become effective on the date of the execution and delivery hereof by the Funds Administrator on behalf of itself and the Borrowers, the Administrative Agent and the Required Lenders (the “Effective Date”).

          6. Participation Fee. As consideration for entering into the Solus Participation Agreement, Borrowers shall pay to the Agent for the ratable benefit of the Lenders and the benefit of Solus as the holder of the “Loan Participation” sold pursuant to the Solus Participation Agreement a fee in the amount of 1% of the Total Commitments in effect immediately upon the effectiveness of this Amendment (the “Participation Fee”) and, subject to the Solus Participation Agreement, the Agent and the Lenders shall pay to Solus the Participation Fee following receipt thereof from Borrowers, which fee (i)(a) shall constitute part of the Obligations, (b) shall constitute Subordinated Claims (as defined in the Solus Participation Agreement), and (c) shall be fully secured, equally and ratably, by a lien on all of the Collateral securing the Obligations, (ii) shall be fully earned on the Effective Date of this Amendment and due and payable in accordance with the terms hereof, (iii) shall be nonrefundable for any reason whatsoever, and (iv) shall be in addition to any other fees, costs or expenses payable pursuant to the Credit Agreement, the Fee Letter or any other Loan Documents. Subject to the Solus Participation Agreement, the Participation Fee shall be paid to Agent by Borrowers and transferred from Agent within one Business Day of its receipt thereof to Solus on the earlier to occur of the Facility Termination Date or the Consummation Date. The obligation of Agent and the Lenders to pay the Participation Fee to Solus shall be entirely dependent of Borrowers first paying the Participation Fee to Agent, and

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accordingly neither Agent nor any Lender shall have any obligation to pay the Participation Fee to Solus except to the extent it has received the Participation Fee from Borrowers. In addition to the rights provided by the Solus Participation Agreement, Solus shall be a third-party beneficiary of this Amendment for the sole purpose of effectuating or enforcing this section 6 of this Amendment.

          7. Reference to and Effect Upon the Credit Agreement.

               (a) Except as specifically amended above, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.

               (b) The execution, delivery and effectiveness of this Amendment (i) shall not operate as a waiver of any right, power or remedy of the Administrative Agent or any Lender under the Credit Agreement or any Loan Document, nor constitute a waiver of any Default or provision of the Credit Agreement or any Loan Document, except as specifically set forth herein and (ii) shall not give rise to any obligation on the part of the Administrative Agent or the Lenders to further modify or waive any term or condition of the Credit Agreement or any of the other Loan Documents or give rise to any defenses or counterclaims to the right of the Administrative Agent or the Lenders, subject to the terms hereof, to enforce their rights and remedies under the Credit Agreement and the other Loan Documents. Except as expressly limited herein, the Administrative Agent and the Lenders hereby expressly reserve all of their rights and remedies under the Loan Documents and under applicable law with respect to all existing and future Defaults. Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby.

               (c) The parties acknowledge that this Amendment embodies the entire agreement and understanding among the Borrowers, the Administrative Agent and the Lenders with respect to the subject matter hereof and supersedes all prior discussions, agreements and understandings among the Borrowers, the Administrative Agent and the Lenders relating to the subject matter hereof.

          7. Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York.

          8. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purposes.

          9. Counterparts. This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed an original but all such counterparts shall constitute one and the same instrument.

[Signature Pages Follow]

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          IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and year first above written.

[SIGNATURE PAGES FOLLOW]

DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Administrative Agent,
Collateral Agent and a Lender

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

JPMORGAN CHASE BANK, N.A.

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

GENERAL ELECTRIC CAPITAL CORPORATION

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

LASALLE BUSINESS CREDIT, LLC

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

WACHOVIA CAPITAL FINANCE
CORPORATION (CENTRAL)

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

WELLS FARGO FOOTHILL, LLC

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

GMAC COMMERCIAL FINANCE LLC

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

MERRILL LYNCH CAPITAL

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

PNC BANK, NATIONAL ASSOCIATION

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

ALLIED IRISH BANK, PLC

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

WEBSTER BUSINESS CREDIT CORPORATION

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

UPS CAPITAL CORPORATION

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

E*TRADE BANK

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

WELLMAN, INC.

By:

Name:

Title:

PRINCE, INC.

By:

Name:

Title:

WELLMAN OF MISSISSIPI, INC.

By:

Name:

Title:

CARPET RECYCLING OF GEORGIA, INC.

By:

Name:

Title:

ALG, INC.

By:

Name:

Title:

FIBER INDUSTRIES, INC.

By:

Name:

Title:

PTA RESOURCES, LLC

By:

Name:

Title:

Fifth Amendment to Credit Agreement Signature Page

EX-99.3

EXHIBIT 99.3

Wellman, Inc.
Debtor-in-Possession
Analysis of Financial Statements for DIP Compliance
May 2008

An analysis of the May 2008 operating results of Wellman, Inc. and subsidiaries (also referred to as “Wellman”, “we”, “our” and “us”) are presented below. Wellman, Inc. and certain subsidiaries filed for bankruptcy protection under the provisions of Chapter 11 on February 22, 2008. References to pre-petition and post-petition amounts are with respect to the February 22, 2008 filing date. In addition, reference to full year 2008 operating results reflects pre-petition and post-petition results.

Consolidated Statement of Operations

The $2.7 million increase in gross profit (from $1.9 million in April to $4.6 million in May) was attributable to an increase in the chemical-based segment ($2.9 million) reduced by a decrease in the recycled-based segment ($0.2 million). In the chemical based segment, Current Raw Material Margin (which is the difference between the current month selling price and purchase price) increased by $2.5 million. This increase was more than offset by the FIFO method of accounting for inventory, which resulted in $5.0 million of higher raw material costs from prior months being charged against current month’s selling prices. In May, polyester staple fiber sales volumes were flat and PET resins sales volumes increased by approximately 13 million pounds. The remaining increase in gross profit was attributable to the combined effect of reduced plant spending and favorable developments associated with pending litigation (approximately $5.2 million combined total). Gross profit for the recycled-based segment decreased, due primarily to lower raw material margins mainly attributable to increased raw material costs. SG&A costs decreased by $0.6 million due to continued cost reduction activities and $0.1 of Other Income was attributable to anti-dumping proceeds. As a result of the above items, we reported operating income of $2.5 million in May compared to an operating loss of $0.7 million in April. Interest expense increased slightly to $1.0 million in May compared to $0.9 million in April. Interest expense was calculated only on the amount borrowed under our Debtor-in-Possession Credit Agreement (the “DIP Facility”). Reorganization costs, which consisted primarily of legal fees related to the Chapter 11 filing, were $2.6 million in May, compared to $3.1 million in April. As a result, our net loss was $1.1 million for May 2008.

Consolidated Balance Sheet

The balance sheet at May 31, 2008, reflected $174.1 million in borrowings under the DIP Facility and $13.0 million in cash and cash equivalents. The total borrowed at May 31, net of cash on hand, was $19.2 million higher than April. Accounts receivable, inventories and prepaid expenses increased by $7.1 million, $9.4 million, and $9.5 million, respectively, due to increased selling prices, higher raw material costs and a larger quantity of raw material inventory in the chemical-based segment. In addition accounts payable increased by $7.3 million.

Consolidated Statement of Cash Flows

We borrowed an additional $19.2 million in May to fund our operations and pay reorganization costs of $3.0 million. The additional funding for operations was primarily attributable to increases in working capital.

Wellman, Inc.
(Debtor-in-Possession)
Consolidated Statements of Operations
(In Millions)

	May			April
	2008			2008
Net Sales	$	94.5		$	85.1
Cost of Sales		89.9			83.2
Gross Profit (Loss)		4.6			1.9
Selling, General and Administrative Expenses		2.2			2.8
Other (Income) Loss		(0.1	)		(0.2	)
Operating Income (Loss)		2.5			(0.7	)
Interest Expense, Net*		1.0			0.9
Earnings (Loss) from Continuing Operations Before Reorganization Items and Income Taxes		1.5			(1.6	)
Reorganization Items, Net		2.6			3.1
Earnings (Loss) from Continuing Operations Before Income Taxes		(1.1	)		(4.7	)
Income Tax Expense (Benefit)		0.0			0.0
Earnings (Loss) from Continuing Operations		(1.1	)		(4.7	)
Earnings (Loss) from Discontinued Operations, Net of Tax		0.0			0.0
Net Earnings (Loss)		($1.1	)		($4.7	)

*  -     Interest expense subsequent to Feb 22, 2008 only reflects interest on the DIP financing. Interest on the compromised debt, per the debt agreements, was $3.4 for May and $3.5 for April. These amounts are not included in the financial statements.

Wellman, Inc.
(Debtor-in-Possession)
Consolidated Statements of Operations
(In Millions)

	For the Month Ended						For the Year-to-Date
	May						Period Ended May
	2008			2007			2008			2007
Net Sales	$	94.5		$	107.6		$	419.6		$	524.3
Cost of Sales		89.9			105.3			408.8			515.2
Gross Profit (Loss)		4.6			2.3			10.8			9.1
Selling, General and Administrative Expenses		2.2			3.4			14.6			18.7
Other (Income) Loss		(0.1	)		0.0			(0.2	)		(1.8	)
Operating Income (Loss)		2.5			(1.1	)		(3.6	)		(7.9	)
Interest Expense, Net*		1.0			5.5			13.0			25.8
Earnings (Loss) from Continuing Operations Before Reorganization Items and Income Taxes		1.5			(6.6	)		(16.6	)		(33.6	)
Reorganization Items, Net		2.6			0.0			11.8			0.0
Earnings (Loss) from Continuing Operations Before Income Taxes		(1.1	)		(6.6	)		(28.4	)		(33.6	)
Income Tax Expense (Benefit)		0.0			0.0			0.0			(0.0	)
Earnings (Loss) from Continuing Operations		(1.1	)		(6.6	)		(28.4	)		(33.6	)
Earnings (Loss) from Discontinued Operations, Net of Tax		0.0			(1.2	)		0.0			(1.6	)
Net Earnings (Loss)		($1.1	)		($7.8	)		($28.4	)		($35.2	)

*  -     Interest expense subsequent to Feb 22, 2008 only reflects interest on the DIP financing. Interest on the compromised debt, per the debt agreements, was $3.4 for the month of May and $11.1 year-to-date after Feb 22, 2008. These amounts are not included in the financial statements.

Wellman, Inc.
(Debtor-in-Possession)
Condensed Consolidated Balance Sheet
(In millions)

	May 31,			April 30,
	2008			2008
Assets
Current assets:
Cash and cash equivalents	$	13.0		$	0.3
Accounts receivable		157.0			149.9
Inventories		102.6			93.2
Prepaid expenses and other current assets		39.5			30.8
Current assets held for sale		—			—
Total current assets		312.1			274.2
Property, plant and equipment:
Land, buildings and improvements		90.4			90.4
Machinery and equipment		339.4			340.1
CIP		4.7			4.4
		434.5			434.9
Less accumulated depreciation		196.7			196.0
Net property, plant and equipment		237.8			238.9
Other assets		11.3			10.9
Noncurrent assets held for sale		—			0
Total Assets	$	561.2		$	524.0
Liabilities and Stockholders’ Deficit
Liabilities Not Subject to Compromise
Current Liabilities:
Accounts payable — trade	$	11.7		$	4.4
Accrued liabilities		20.2			20.7
Debtor in possession credit agreement		174.1			142.2
Other debt		—			—
Current liabilities associated with assets held for sale		—			—
Total current liabilities		206.0			167.3
Liabilities subject to compromise		530.9			531.2
Long-term debt		—			—
Deferred income taxes and other noncurrent liabilities		37.2			37.1
Noncurrent liabilities associated with assets held for sale		—			—
Total Liabilities		774.1			735.6
Stockholders’ Deficit:
Common stock		—			—
Preferred stock		185.7			185.7
Paid-in capital		248.4			248.7
Common stock warrants		4.9			4.9
Accumulated other comprehensive loss		—			—
Accumulated deficit		(602.4	)		(601.4	)
Less common stock in treasury		(49.5	)		(49.5	)
Total Stockholders Deficit		(212.9	)		(211.6	)
	$	561.2		$	524.0

Wellman, Inc.
(Debtor-in-Possession)
Condensed Consolidated Balance Sheet
(In millions)

	May 31,			May 31,
	2008			2007
Assets
Current assets:
Cash and cash equivalents	$	13.0		$	1.1
Accounts receivable		157.0			148.8
Inventories		102.6			112.7
Prepaid expenses and other current assets		39.5			32.1
Current assets held for sale		—			59.8
Total current assets		312.1			354.5
Property, plant and equipment:
Land, buildings and improvements		90.4			83.8
Machinery and equipment		339.4			950.9
CIP		4.7			11.7
		434.5			1,046.4
Less accumulated depreciation		196.7			504.3
Net property, plant and equipment		237.8			542.1
Other assets		11.3			49.1
Noncurrent assets held for sale		—			31.6
Total Assets	$	561.2		$	977.3
Liabilities and Stockholders’ Deficit
Liabilities Not Subject to Compromise
Current Liabilities:
Accounts payable — trade	$	11.7		$	86.0
Accrued liabilities		20.2			24.3
Debtor in possession credit agreement		174.1			—
Other debt		—			—
Current liabilities associated with assets held for sale		—			19.2
Total current liabilities		206.0			129.5
Liabilities subject to compromise		530.9			—
Long-term debt		—			576.1
Deferred income taxes and other noncurrent liabilities		37.2			74.3
Noncurrent liabilities associated with assets held for sale		—			28.2
Total Liabilities		774.1			808.1
Stockholders’ Deficit:
Common stock		—			0.0
Preferred stock		185.7			174.1
Paid-in capital		248.4			247.6
Common stock warrants		4.9			4.9
Accumulated other comprehensive loss		—			27.0
Accumulated deficit		(602.4	)		(234.9	)
Less common stock in treasury		(49.5	)		(49.5	)
Total Stockholders Deficit		(212.9	)		169.2
	$	561.2		$	977.3

Wellman, Inc.
(Debtor-in-Possession)
Simplified Statement of Cash Flows
(in millions)

	May			April
	2008			2008
Cash flow from operating activities:
Net earnings (loss)		($1.1	)		($4.7	)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Loss from discontinued operations, net of tax		0.0			0.0
Depreciation		1.4			1.2
Amortization		1.0			1.4
Amortization in interest expense		0.3			0.3
Deferred taxes on income		0.0			0.0
Reorganization Items		2.6			3.1
Payment of reorganization items		(3.0	)		(0.9	)
Gain on sale of assets		0.0			(0.2	)
Changes in assets and liabilities:
Accounts receivable		(6.7	)		(14.6	)
Inventories		(9.4	)		(8.0	)
Prepaid expenses and other current assets		(10.8	)		7.0
Other assets		(0.2	)		(0.2	)
Accounts payable and accrued liabilities		7.0			(3.0	)
Other liabilities		0.0			(0.7	)
Other		0.0			0.2
Net cash provided (used) by operating activities		(18.9	)		(19.1	)
Cash flows from investing activities:
Additions to property, plant and equipment (net)		(0.3	)		(0.4	)
Proceeds from sale of assets		0.0			0.3
Net cash used by investing activities		(0.3	)		(0.1	)
Cash flows from financing activities:
Borrowings (Repayments) of long-term debt		31.9			18.2
Dividends paid on common stock		0.0			0.0
Debt and equity issuance costs		0.0			0.0
Net cash provided (used) by financing activities		31.9			18.2
Discontinued Operations:
Operating activities		0.0			0.0
Investing activities		0.0			0.0
Financing activities		0.0			0.0
Net cash provided (used) by discontinued operations		0.0			0.0
Increase (decrease) in cash and cash equivalents		12.7			(1.0	)
Cash and cash equivalents at beginning of period		0.3			1.3
Cash and cash equivalents at end of period	$	13.0		$	0.3

Wellman, Inc.
(Debtor-in-Possession)
Simplified Statement of Cash Flows
May Fiscal Period
(in millions)

	For the Month						For the YTD Period
	Ended May						Ended May
	2008			2007			2008			2007
Cash flow from operating activities:
Net earnings (loss)		($1.1	)		($7.8	)		($28.4	)		($35.2	)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Loss from discontinued operations, net of tax		0.0			1.2			0.0			1.6
Depreciation		1.4			4.1			5.7			19.2
Amortization		1.0			1.6			6.8			7.0
Amortization in interest expense		0.3			0.4			1.2			1.8
Deferred taxes on income		0.0			(0.0	)		0.0			(0.1	)
Johnsonville fibers disposal costs		0.0			0.0			0.0			(1.0	)
Payments made against Jville fiber disposal costs		0.0			0.0			0.0			(2.2	)
Reorganization Items		2.6			0.0			11.8			0.0
Payment of reorganization items		(3.0	)		0.0			(7.2	)		0.0
Gain on sale of assets		0.0			0.0			(0.2	)		0.0
Changes in assets and liabilities:
Accounts receivable		(6.7	)		17.4			(28.0	)		12.7
Inventories		(9.4	)		(16.9	)		(5.7	)		1.7
Prepaid expenses and other current assets		(10.8	)		0.1			(18.1	)		2.4
Other assets		(0.2	)		0.4			(0.7	)		0.4
Accounts payable and accrued liabilities		7.0			12.7			14.6			(3.6	)
Other liabilities		0.0			(0.4	)		(2.0	)		(2.2	)
Other		0.0			(1.8	)		0.0			(2.1	)
Net cash provided (used) by operating activities		(18.9	)		11.0			(50.3	)		0.4
Cash flows from investing activities:
Additions to property, plant and equipment (net)		(0.3	)		(0.9	)		(1.8	)		(4.1	)
Proceeds from sale of assets		0.0			0.0			0.3			0.0
Net cash used by investing activities		(0.3	)		(0.9	)		(1.5	)		(4.1	)
Cash flows from financing activities:
Borrowings (Repayments) of long-term debt		31.9			(24.4	)		68.9			0.0
Dividends paid on common stock		0.0			0.0			0.0			(0.7	)
Debt and equity issuance costs		0.0			0.0			(4.1	)		0.0
Net cash provided (used) by financing activities		31.9			(24.4	)		64.8			(0.6	)
Discontinued Operations:
Operating activities		0.0			(0.6	)		0.0			(6.5	)
Investing activities		0.0			(0.5	)		0.0			(1.2	)
Financing activities		0.0			14.7			0.0			13.1
Net cash provided (used) by discontinued operations		0.0			13.6			0.0			5.4
Increase (decrease) in cash and cash equivalents		12.7			(0.7	)		13.0			1.1
Cash and cash equivalents at beginning of period		0.3			1.8			0.0			0.0
Cash and cash equivalents at end of period	$	13.0		$	1.1		$	13.0		$	1.1

Wellman, Inc.
EBITDAR, as defined

     We have provided a non-GAAP measure, “EBITDAR, as defined,” because our DIP Credit Agreement uses this measurement as a key component. In accordance with our DIP Credit Agreement, we must maintain a minimum cumulative EBITDAR (cumulative monthly commencing March 1, 2008, and rolling into trailing twelve months) tested as of the last day of the applicable month, with a report due on the fifteenth day after the end of each month, commencing with the first full month following the Petition Date. We believe it is also an important measurement tool for (1) financial institutions that provide us with capital; (2) investors; and (3) our Board and management. In each instance, we used EBITDAR, as defined because it excluded items that are not expected to impact the long- term cash flow of the businesses and are not an indication of our ongoing operating performance. In addition, EBITDAR, as defined is a measure frequently used to value an enterprise and to enable investors to analyze the efficiency of our operations and to compare and/or rank use with other companies of differing capital structures. Our Board of Directors, CEO (our chief operating decision maker), and our senior management use EBITDAR, as defined to evaluate the operating performance of our segments and determine incentive compensation for employees throughout the organization. EBITDAR, as defined, under the DIP Credit Agreement is calculated by adding Earnings (loss) from continuing operations, income tax expense (benefit), interest expense, non-cash charges and non-recurring fees, cash charges, and other cash expenses made or incurred in connection with entering into the DIP Credit Agreement.

     The following table reconciles Loss from continuing operations to EBITDAR, as defined for each month and the five months ending May 31, 2008.

																Year-to-
	January			February			March			April			May			Date
	2008			2008			2008			2008			2008			May 2008
Loss from Continuing Operations	$	(5,038	)	$	(15,276	)	$	(2,388	)	$	(4,670	)	$	(1,083	)	$	(28,455	)
Income Tax Expense (Benefit)		—			—			—			—			—			—
Interest Expense, Net		4,675			5,505			925			903			999			13,007
Depreciation & Amortization		2,530			2,441			2,493			2,615			2,393			12,472
Permitted Adjustments:
Reorganization Items		—			3,349			2,798			3,098			2,583			11,828
Inventory Reserves		310			802			27			1,130			—			2,269
Claims Accrual Non-cash		—			—			—			—			353			353
Uncollectible Accounts		144			—			65			—			—			209
Hurricane Katrina Costs		—			63			—			—			—			63
Sale of Jville Assets		—			—			48			(232	)		—			(184	)
Total permitted adjustments		454			4,214			2,938			3,996			2,936			14,538
EBITDAR, as defined	$	2,621		$	(3,116	)	$	3,968		$	2,844		$	5,245		$	11,562

     Despite the importance of EBITDAR, as defined, we recognize that this non-GAAP financial measure does not replace the presentation of our GAAP financial results and are not intended to represent cash flows or an alternative to net earnings (loss). The EBITDAR, as defined information we provide is simply supplemental information and an additional measurement tool to assist our management and certain investors in analyzing our performance.

In re Wellman, Inc., et al.
Case No. 08-10595 (SMB)
Reporting Period: May 1 — May 31, 2008
Cash Disbursements by Petitioning Entity

		May 1 - May 31,
Petitioning Entities	Case Number:	2008
Wellman, Inc.	081-08-10595	$	107,760,828
Fiber Industries, Inc.	081-08-10607		—
Wellman of Mississippi, Inc.	081-08-10605		—
PTA Resources LLC	081-08-10596		—
Prince, Inc.	081-08-10604		34
ALG, Inc.	081-08-10599		34
Wellman Fibres Ltd.	081-08-10598		—
MRF, Inc.	081-08-10600		—
Warehouse Associates Inc.	081-08-10601		—
MED Resins, Inc.	081-08-10602		—
Carpet Recycling of Georgia Inc.	081-08-10603		—
Josdav, Inc.	081-08-10606		—
		$	107,760,896