FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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(Print or Type Responses)

1. Name and Address of Reporting Person *   ELM RIDGE CAPITAL MANAGEMENT LLC 2. Date of Event Requiring Statement (Month/Day/Year) 01/01/2007 3. Issuer Name and Ticker or Trading Symbol KAPSTONE PAPER & PACKAGING CORP [SCDE] (Last) (First) (Middle) 3 WEST MAIN STREET, 3RD FLOOR 4. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director __X__ 10% Owner _____ Officer (give title below) _____ Other (specify below) 5. If Amendment, Date Original Filed(Month/Day/Year) (Street) IRVINGTON, NY 10533 6. Individual or Joint/Group Filing(Check Applicable Line) ___ Form filed by One Reporting Person _X_ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Beneficially Owned

1.Title of Security (Instr. 4) 2. Amount of Securities Beneficially Owned (Instr. 4) 3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5) 4. Nature of Indirect Beneficial Ownership (Instr. 5) Common Stock 1,891,634 I Footnote 1 (1)

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.			SEC 1473 (7-02)
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Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Warrants	01/01/2007	08/15/2009	Common Stock Purchase Warrants	3,828,580	$ 5	I	Footnote 1 (1)

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
ELM RIDGE CAPITAL MANAGEMENT LLC 3 WEST MAIN STREET 3RD FLOOR IRVINGTON, NY 10533	Â	  X	Â	Â
GUTFLEISH RONALD E C/O ELM RIDGE CAPITAL MANAGEMENT, LLC 3 WEST MAIN STREET, 3RD FLOOR IRVINGTON, NY 10533	Â	  X	Â	Â

Signatures

Elm Ridge Capital Management, LLC, By: /s/ Ronald E. Gutfleish, Managing Member		02/16/2007
**Signature of Reporting Person		Date
/s/ Ronald E. Gutfleish		02/16/2007
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 5(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	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.

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