Caraustar Industries files Chapter 11 - Atlanta Business Chronicle:

jiqatili.wordpress.com
All trade creditors, customers and employees will receive all amountsz owedto them, the Austell, Ga.-based recycled paperboard and packaginb company said. It will ask the U.S. Bankruptcgy Court for the Northern District of Georgia for approvalk to pay the amountss in the ordinary cours eof business. Caraustar CSAR) also reached agreement with debt holderxs to reducethe company's debt obligations by $135 million. Unde r the Plan, holders of outstandingt sharesof Caraustar's common stock will receiv their pro rata share of $2.9 or 10 cents a share, subject to certai conditions. The restructuring plan calls for the exchangw ofthe company's existing 7.375 percent and 7.
25 percentg senior notes for an aggregate of $85 million in new senior secured notea and 100 percent of the commohn stock of the reorganized will become the company's controlling shareholder. In conjunction with the Caraustar has landeda $75 million debtor-in-possessio line of credit from General Electric Capital The money may be used for cash collateralizing outstanding letters of credit, paying for goodxs and services in the ordinary course of the business and generap corporate purposes. "Caraustar took decisive action to substantially reducethe company's debt and prospectivelyh reduce costs,” said Presidentg and CEO Michael J.
Keough, in a “Once our financial restructuring is webelieve Caraustar's new capitak structure combined with the cost savings achieve d by operating as a private entithy will provide a lean and flexible foundationb for sustainable profitability and better position the company to meet the challenges of our industryt and this recessionary economy head on." The companu posted a net loss of $4.4 million in the first quarter of 2009 and had a $99 million loss in 2008.