Smurfit-Stone plan, extension approved by court; exit expected June 30

By Caroline Salls

Pittsburgh, June 21 - Smurfit-Stone Container Corp.'s plan of reorganization was confirmed Monday by the U.S. Bankruptcy Court for the District of Delaware, according to a company news release.

The plan of compromise and arrangement for debtors covered under Smurfit-Stone's Companies' Creditors Arrangement Act case was also approved.

"With confirmation of the plan of reorganization, Smurfit-Stone is now on a path to emerge from our financial restructuring on June 30," chairman and chief executive officer Patrick J. Moore said in the release.

"Upon consummation of the restructuring plan, we will have successfully reduced our debt and realigned our capital structure in a way that dramatically improves the company's prospects for long-term growth and profitability.

"We are pleased to have been able to reach agreement with our creditors and stockholders on a plan that enables us to continue to drive value for our stakeholders and help our customers grow their businesses."

As previously reported, Smurfit-Stone announced on May 24 that it reached a resolution with some holders of its preferred and common stock.

Under that resolution, 4.5% of the new common stock of the reorganized company that the plan previously provided for distribution to unsecured creditors will now be distributed to current stockholders, with 2.25% being distributed to the holders of the preferred stock and 2.25% being distributed to holders of the common stock.

Under the plan:

• All of the company's existing secured debt will be fully repaid in cash;

• Substantially all of the existing unsecured debt and claims against Smurfit-Stone Container Enterprises, including all of the outstanding unsecured senior notes and bonds, will be exchanged for common stock of the reorganized Smurfit-Stone. However, these creditors were entitled to choose a cash-out option;

• Existing holders of Smurfit-Stone common and preferred stock will receive a total of 4.5% of the new stock in the reorganized company; and

• The assets of the company's Canadian debtors will be sold to a newly formed Canadian subsidiary of Smurfit-Stone in exchange for the repayment of the secured debt obligations of the Canadian debtors and cash of the reorganized company for distribution to the Canadian debtors' unsecured creditors if they vote to accept the plan.

Exclusivity extension

In addition, Smurfit-Stone obtained an extension to its exclusive periods to file a plan of reorganization and to solicit votes on the plan.

The company's exclusive plan-filing period was extended to July 26 from May 21 and the solicitation period to Sept. 26 from July 21.

Smurfit-Stone said it was seeking the extension in order to be able to react to any issues raised by the court's decision on plan confirmation.

Smurfit-Stone also cited the size and complexity of its case as a basis for an extension.

A hearing on the exclusivity extension was scheduled for June 22, but the motion was uncontested.

Smurfit-Stone, a Chicago-based manufacturer of paperboard and paper-based packaging, filed for bankruptcy on Jan. 26, 2009. Its Chapter 11 case number is 09-10235.

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