Pliant files amended plan of reorganization to include bondholder, shareholder agreement

By Caroline Salls

Pittsburgh, June 19 - Pliant Corp. filed its fifth amended plan of reorganization Monday to reflect its agreement with representatives of its key classes of bondholders and shareholders under which all objections to confirmation of the company's plan of reorganization will be withdrawn, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

The agreement was reached with representatives of Pliant's first-lien, second-lien and senior subordinated noteholders as well as holders of existing preferred and common stock.

Terms of the agreement include a 0.225% increase in the interest rate of Pliant's existing first-lien notes, a $4 million cash consent fee for holders of the company's second-lien notes and a 1.5% increase in the allocation of the company's new preferred equity to holders of Pliant's existing senior subordinated notes.

Under the terms of the plan, holders of Pliant's $320 million of 13% senior subordinated notes will receive up to $35 million in new notes.

New Pliant will issue shares of new common stock, which will be distributed to holders of old note claims, series A preferred stock interests and outstanding common stock.

New Pliant will also issue 335,600 shares of series AA preferred stock.

The company will also issue $35 million of new 13% senior subordinated notes due 2010.

Plan creditor treatment

Treatment of creditors under the plan will include:

• Holders of Pliant's $320 million of 13% senior subordinated notes will receive up to $35 million in new senior subordinated notes, their share of the reorganized company's common stock and newly issued series AA redeemable preferred stock, as well as cash equal to the consenting noteholders' professional fees.

• Holders of revolving credit facility claims, general unsecured claims and debtor-in-possession facility claims will receive 100% cash recovery;

• Holders of first-lien note claims will have their claims reinstated and will receive their share of first-lien additional interest;

• Holders of second-lien note claims will have their claims reinstated and will receive their share of second-lien additional interest;

• Holders of series A preferred stock interests will receive a share of the series A/series AA preferred stock and the series A common stock.

• Holders of series B preferred stock interests will receive $5,258 per share in cash, provided that the holder is eligible to participate in the management stock plan or deferred cash incentive plan.

All unvested series B preferred stock interests will be canceled and holders will receive no distribution.

• Holders of outstanding common stock interests will receive their share of new common stock in the reorganized company.

Pliant said it plans to obtain a two-year $140 million exit facility, including a $25 million sublimit for letters of credit.

A plan of reorganization confirmation hearing is scheduled for June 23, and, if the plan is confirmed, the company expects to emerge from Chapter 11 shortly thereafter.

As previously reported, Pliant has obtained a commitment for a $200 million revolving credit exit facility from Merrill Lynch Commercial Finance Corp.

Pliant, a Schaumburg, Ill., producer of film and flexible packaging products, filed for bankruptcy on Jan. 3, 2006 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 06-10001.

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