Caraustar Industries files Chapter 11 - Atlanta Business Chronicle:

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All trade creditors, suppliers, customers and employees will receive all amountsx owedto them, the Austell, Ga.-basexd recycled paperboard and packaging compan said. It will ask the U.S. Bankruptcy Courtf for the Northern District of Georgiaa for approval to pay the amounts in the ordinary coursof business. Caraustar (NASDAQ: also reached agreement with debt holders to reducrthe company's debt obligations by $135 Under the Plan, holdersx of outstanding shares of Caraustar's commonj stock will receive theifr pro rata share of $2.9 or 10 cents a share, subject to certain conditions. The restructuring plan calls for the exchangwe ofthe company's existing 7.375 percent and 7.
25 percent seniore notes for an aggregate of $85 milliom in new senior secured notes and 100 percent of the common stock of the reorganized company. will become the company'es controlling shareholder. In conjunction with the Caraustar has landeda $75 million debtor-in-possession line of credigt from General Electric Capital Corp. The moneyy may be used for cash collateralizinv outstanding lettersof credit, paying for goods and servicess in the ordinary course of the business and generak corporate purposes. "Caraustar took decisive actiomn to substantially reducethe company's debt and prospectivelh reduce costs,” said President and CEO Michaelo J. Keough, in a statement.
“Once our financial restructuringis complete, we believre Caraustar's new capital structure combined with the cost savings achieved by operating as a private entitty will provide a lean and flexibls foundation for sustainable profitability and better position the companyu to meet the challengeas of our industry and this recessionaryt economy head on." The company posted a net loss of $4.4 milliom in the first quarter of 2009 and had a $99 millionn loss in 2008.