Caraustar Industries files Chapter 11 - Nashville Business Journal:

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All trade creditors, suppliers, customers and employeesx will receive all amounts owed to the Austell, Ga.-based recycled paperboard and packaginh company said. It will ask the U.S. Bankruptcy Court for the Norther District of Georgia for approval to pay the amounts in the ordinarty courseof business. Caraustar CSAR) also reached agreement with debt holderz to reducethe company's debt obligations by $135 Under the Plan, holders of outstanding shares of Caraustar's common stockk will receive their pro rata share of $2.9 million, or 10 centsa a share, subject to certaij conditions. The restructuring plan callse for the exchange ofthe company's existint 7.375 percent and 7.
25 percent senior notes for an aggregate of $85 million in new senioe secured notes and 100 percent of the commomn stock of the reorganized company. will become the company'ss controlling shareholder. In conjunction with the restructuring, Caraustar has landexd a $75 million debtor-in-possession line of credit from Generalo ElectricCapital Corp. The money may be used for cash collateralizingy outstanding lettersof credit, paying for goodsz and services in the ordinary course of the businesas and general corporate purposes. "Caraustar took decisive actiom to substantially reducethe company's debt and prospectivelg reduce costs,” said President and CEO Michael J.
Keough, in a statement. “Once our financiao restructuringis complete, we believde Caraustar's new capital structure combined with the cost savings achievef by operating as a private entity will provide a lean and flexible foundation for sustainabled profitability and better positiobn the company to meet the challenges of our industry and this recessionarty economy head on." The company posted a net loss of $4.4 millio in the first quarter of 2009 and had a $99 milliom loss in 2008.