The two sides - the bondholders and the partnership - have agreed on a strategy to market the plant and to restructure financially by seeking new investors, Bellinger said.
Future investors may want the plant to continue recycling paper or do a different task, he said.
There is no indication of when the plant might reopen.
Major repairs to the plant haven't begun yet, said G. Richard Gray, the receiver for the plant at the corner of Eastern and Memorial boulevards.
Bellinger said it would be difficult, but not impossible, for the plant to reopen before arbitration is settled between the partnership and the plant's builders, SBCCS Constructors Joint Venture.
The partnership wants more than the $7.6 million it originally sought from SBCCS, said Arthur Fergenson, a Baltimore attorney for the partnership. Fergenson would not release the exact amount the partnership is seeking.
Arbitration hearings are not expected to be held before March, Bellinger said.
The money is being sought because of needed repairs at the plant, an advisor to the bondholders had said in October.
The plant had problems handling impurities from sticky substances, such as envelopes, said J.T. Atkins, managing director for Oppenheimer & Co. in New York.
Atkins also had said SBCCS had wanted $6 million from the partnership.
A standstill agreement tied to the consent order means the partnership is not expected to file for bankruptcy soon, Bellinger said.
The plant shut down temporarily in April 1997, then shut down permanently in August before going into receivership on Aug. 14.
Nineteen people are employed at the plant now, compared to 95 employees before the April shutdown, officials said.
The consent order clarifies the roles of Hagerstown Fiber Limited Partnership, the receiver and 1st National Bank of Maryland.