Judge Grants Smurfit-Stone More Time for Reorganization Plan
Jan 15, 2010 - A bankruptcy judge on Thursday (Jan.14) extended for four more months the exclusive right of Smurfit-Stone Container Corp to file a plan of reorganization, over the objection of investment funds, according to Reuters.
The containerboard and packaging maker filed for bankruptcy a year ago along with more than 20 subsidiaries.
The funds that objected, Aurelius Capital Management and Columbus Hill Capital Management, sought to end the bankruptcy protection of a single subsidiary, a financing structure known as Finance II, Reuters said.
The two funds hold 62 percent of the $200 million of notes issued by Finance II, which has no operations or employees and was set up mainly for tax purposes. The funds have argued that the subsidiary will have a greater recovery if it were liquidated rather than remained part of the reorganization.
Judge Brendan Shannon overruled the objection and said many of the funds' arguments will be heard again on Jan. 29, when the court will hear their request to convert the Finance II bankruptcy to a Chapter 7 liquidation, Reuters said.
A hearing on the company's disclosure statement, which must be approved so it can send its plan of reorganization to creditors, will be heard the same day.