A U.S. Bankruptcy Court judge has issued the fastest approval of a Chapter 11 reorganization plan in the history of the Northern District of Georgia.
That’s according to information from King & Spalding, the firm that represented paperboard company Caraustar Industries Inc., in its reorganization.
The company filed its voluntary petition and its Chapter 11 plan on May 31, with some amended plans and plan supplements filed after that date; just 65 days later, on Aug. 4, Judge Mary Grace Diehl approved the plan, which allows Caraustar to reduce its debt by about $135 million. The company’s bankruptcy court petition indicates that its overall debt is between $100 million and $500 million, with between $50 million and $100 million in assets. Among the company’s largest unsecured creditors listed in the bankruptcy petition are Oracle USA, Food Lion LLC and E.I. du Pont de Nemours & Co. Caraustar owes the most money—$29 million—to unsecured creditor Bank of New York Mellon, according to the filing.
Caraustar, based in Austell, has nearly 3,000 employees and is one of the largest integrated manufacturers of 100 percent recycled paperboard and converted paperboard projects in North America.
Caraustar is represented by King & Spalding lawyers James A. Pardo Jr., Jessica S. Jackson, Mark M. Maloney and Michelle L. Carter. The company’s Ad Hoc Committee of 2009 and 2010 Noteholders is represented by Dennis J. Connolly at Alston & Bird, and by several attorneys from Stroock & Stroock & Lavan in New York.
Caraustar, a publicly traded company, reported $159.3 million in sales in the first quarter of 2009, compared with $216.5 million for the same period in 2008. The company also reported a net loss of $4.4 million in the first quarter of this year, or 15 cents per share, compared with $200,000, or $0.01 per share, for the same period in 2008. The company has not yet issued a report for the second quarter.