| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers P > Headlines for Pliant Corp. > News item |
Pliant senior secured noteholders oppose plan of reorganization
New York, May 22 - Pliant Corp.'s senior secured noteholders came out against the company's proposed plan of reorganization, saying it violated their rights by making distributions to holders of the subordinated notes before the senior secured debt is paid in full, according to filings Monday with the U.S. Bankruptcy Court for the District of Delaware.
In addition, the noteholders said they have concerns about the feasibility of the plan since it would result in Pliant exiting Chapter 11 with more than $650 million in senior secured debt while being based on "aggressive projections and optimistic estimates of future growth, despite past failures to reach targeted performance levels," according to one of the filings.
The filings were made by the ad hoc committee of first lien noteholders, representing some investors owning Pliant's 11 1/8% senior secured notes due 2009 and 11 5/8% senior secured notes due 2009, and also by the ad hoc committee of holders of the second lien 11 1/8% senior secured notes due 2009. Both groups made similar arguments.
Specifically, the plan proposes making cash payments, adding extra senior secured debt and taking other steps that impair the contractual rights of the first lien noteholders, the filing by the first lien noteholders said.
In particular, the creditors cited the proposed issuance of $20 million of tack-on first lien notes and payment of a 1% cash consent fee to subordinated noteholders as violating provisions of the indenture for the first lien notes. As a result, these notes are impaired, the holders claim.
Pliant, a Schaumburg, Ill., producer of film and flexible packaging products, filed for bankruptcy on Jan. 3. Its Chapter 11 case number is 06-10001.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.