Smurfit-Stone Gets Court Approval for First Day Motions
Jan. 27, 2009 - Smurfit- Stone today announced that the U.S. Bankruptcy Court in Wilmington, Delaware has granted the relief the Company requested in its "First Day Motions" filed in conjunction with its voluntary filing for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
The court issued a variety of orders on either a final or interim basis that will ensure that Smurfit-Stone continues to operate in a "business as usual" mode throughout the reorganization process.
The Company's Canadian subsidiaries have received similar relief under the Companies' Creditors Arrangement Act (CCAA) from the Ontario Superior Court of Justice.
Smurfit-Stone has now received court authorization to, among other things:
- Utilize up to $550 million of the Company's new $750 million debtor-in-
possession (DIP) credit facility on an interim basis. As customary, a
hearing at which the Company will seek final court approval for the
full amount of the DIP facility and other First Day Motions has been
scheduled for February 23, 2009.
- Provide employee wages, reimbursements, health care coverage, vacation,
sick leave and similar benefits without interruption;
- Honor customer obligations; and,
- Ensure the continuation of the Company's cash management systems and
other business operations.
Patrick J. Moore, chairman and CEO, said, "The authorization we received from the court is an important and positive first step in our reorganization and allows us to operate in a business as usual mode. We are focused on providing our customers with quality goods and services. Smurfit-Stone intends to pay vendors in the ordinary course under existing terms for all goods and services received after the filing date. We are moving forward to restructure our debt and develop a capital structure more suited to support our long-term growth and profitability."
Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009, in the U.S. Bankruptcy Court in Wilmington, Delaware. The case number is 09-10235. The Canadian subsidiaries also filed to reorganize under the Companies' Creditors Arrangement Act (CCAA) in the Ontario Superior Court of Justice in Canada.
SOURCE: Smurfit-Stone Container Corp.