Smurfit-Stone Container tweaks plan treatment for secured creditors

By Caroline Salls

Pittsburgh, Dec. 23 - Smurfit-Stone Container Corp. filed an amended plan of reorganization and related disclosure statement Tuesday with the U.S. Bankruptcy Court for the District of Delaware that changes the proposed distribution for secured debtholders.

Under the amended plan, all of the company's secured debt would be fully repaid in cash. The original plan called for secured debtholders to be paid in full either in cash, new debt instruments or a combination of cash and debt instruments.

As previously reported, substantially all of the unsecured debt of Smurfit-Stone Container Enterprises, Inc. will be converted to equity, resulting in a significant reduction of total long-term debt.

The company said it would merge with subsidiary Smurfit-Stone Container Enterprises under the plan and become the reorganized company.

Under the plan:

• All of the company's existing secured debt would be fully repaid in cash;

• Substantially all of the existing unsecured debt and claims against Smurfit-Stone Container Enterprises, including all of the outstanding unsecured senior notes and bonds, would be exchanged for common stock of the reorganized Smurfit-Stone;

• Holders of unsecured claims against Smurfit-Stone Container Enterprises of less than or equal to $10,000 would be entitled to receive payment of 100% of their claims in cash;

• All of the existing equity securities of Smurfit-Stone would be canceled, and existing holders of Smurfit-Stone common and preferred stock would receive no distribution;

• The assets of the company's Canadian debtors would be sold to a newly formed Canadian subsidiary of Smurfit-Stone in exchange for the repayment of the secured debt obligations of the Canadian debtors and cash of the reorganized company for distribution to the Canadian debtors' unsecured creditors if they vote to accept the plan; and

• Reorganized Smurfit-Stone and its newly formed Canadian subsidiary would assume all of the existing obligations under the qualified defined benefit pension plans in the United States and Canada sponsored by the debtors, as well as all of the collective bargaining agreements in the United States and Canada.

Smurfit-Stone, a Chicago-based manufacturer of paperboard and paper-based packaging, filed for bankruptcy on Jan. 26, 2009. Its Chapter 11 case number is 09-10235.

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