FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN 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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1. Name and Address of Reporting Person * ELM RIDGE CAPITAL MANAGEMENT LLC   2. Issuer Name and Ticker or Trading Symbol KAPSTONE PAPER & PACKAGING CORP [KPPC] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director __X__ 10% Owner _____ Officer (give title below) _____ Other (specify below) (Last) (First) (Middle) 3 WEST MAIN STREET, 3RD FLOOR 3. Date of Earliest Transaction (Month/Day/Year) 09/30/2008 (Street) IRVINGTON, NY 10533 4. If Amendment, Date Original Filed(Month/Day/Year) 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 Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 09/30/2008   P   45,800 A $ 6.144 1,967,434 I Footnote (1) Common Stock 10/01/2008   P   11,985 A $ 6.0822 1,979,419 I Footnote (1)

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

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Warrants

$ 5

09/30/2008

P

42,900

09/30/2008

08/15/2009

Common Stock

42,900

$ 1.35

4,618,580

I

Footnote (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		X
GUTFLEISH RONALD E C/O ELM RIDGE CAPITAL MANAGEMENT, LLC 3 WEST MAIN STREET, 3RD FLOOR IRVINGTON, NY 10533		X

Signatures

Elm Ridge Capital Management, LLC (+), By: /s/ Ronald E. Gutfleish		10/02/2008
**Signature of Reporting Person		Date
/s/ Ronald E. Gutfleish (+)		10/02/2008
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(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.
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 "group" for purposes of Section 16 of the Securities Exchange  Act of 1934, as amended.

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