Easy peasy...
Back the area with .010" plastic sheet or some manila envelope material of (near) the same thickness using super glue or a thin smear of epoxy.
Use blue painters tape to mask around the area and protect the surrounding primered/painted areas.
Mix up some fine grain two-part putty - green stuff/kneadatite, Aves, or Milliput and let it set for about 15 minutes or so.
Keep the piece flat on the table and lay a thin layer of putty into the area, onto, and over the edges and sculpt in the necessary details - folds, creases, etc. Use water to keep the putty from sticking to the tools (I assume you have some sculpting tools?).
Use a flat wet paint brush to further smooth the putty. Be careful not to drag fingers, tools, or beer glasses through the wet putty.
Allow to set up until hard. Placing the piece under a hot light bulb will speed the curing process.
Once the putty is fully cured, you can use fine sandpaper to further smooth any raised imperfections. Clean out any sanding residue, then brush primer onto the repaired surface; this will fill in any pinholes or other sunken imperfections. Allow to dry.
Use very fine sandpaper to further smooth the area. The idea is remove any remaining sanding scratches, paint grains, or other imperfections. Clean out the sanding residue. Much like working on a car body...
Paint.
Less putty and paint curing time, 15 minutes tops.
Post a pic when you're done!
Glen