The Newark Group Seeks Court OK for Plan of Reorganization
June 16, 2010 - The Newark Group, Inc. yesterday announced that it has filed a voluntary petition under Chapter 11 in the US Bankruptcy court in Newark, New Jersey. The Company seeks court approval of its prepackaged plan of reorganization.
The Cranford, New jersey-based paperboard maker said that its two impaired creditor classes voted in favor of the plan by greater than 90%. Likewise, the company's two impaired equity interests also voted in favor of the plan by greater than 90%.
A court hearing will be held on July 30, 2010 for approval of the plan.
According to The Newark Group, the court heard and approved 11 first day motions. All 11 were approved substantially as submitted. Most importantly, the court approved the DIP financing order allowing the company to access its DIP loans.
The court also approved the company's motion to pay all prepetition vendors in full in the ordinary course, The Newark Group said.
In turn, The Newark Group closed on its two DIP loans, a $50 million revolver and a $110 million term loan led by ORIX Finance. Both loans have now been funded, the company added.
"We are pleased to have the support of our note holders and lenders as we move forward to strengthen our balance sheet and position the company for profitability," said Robert Mullen, Newark's president and CEO.
None of the company's non-US subsidiaries or affiliates were included in the filing.
During the Chapter 11 case, the company will continue normal operations under current management and does not anticipate any changes to its overall business or its ability to produce quality products, it said.
SOURCE: The Newark Group, Inc.