Caraustar disclosure statement approved; confirmation hearing Aug. 4

By Jennifer Lanning Drey

Portland, Ore., June 30 - Caraustar Industries, Inc. received court approval of the disclosure statement for its pre-packaged plan of reorganization, according to a Tuesday filing with the U.S. Bankruptcy Court for the Northern District of Georgia.

The plan confirmation hearing is scheduled for Aug. 4.

As previously reported, under the plan, Caraustar's 7 3/8% senior notes due June 1, 2009 and 7¼% senior notes due May 1, 2010 will be exchanged for $85 million in new senior secured notes and 100% of the common stock on the reorganized company.

In addition, holders of outstanding shares of Caraustar's common stock will receive their share of $2.9 million, or roughly $0.10 per share, subject to specified conditions.

The reorganized company is expected to emerge as a private entity with Wayzata Investment Partners LLC becoming its controlling shareholder.

Creditor treatment

Specific creditor treatment will include:

• Holders of administrative claims and priority tax claims will be paid in full in cash;

• Debtor-in-possession facility claims and pre-bankruptcy credit facility claims will be paid in full in cash from exit financing proceeds;

• Priority non-tax claims, secured industrial revenue bond claims, unsecured industrial revenue bond claims and other secured claims will be reinstated;

• General unsecured claims will be reinstated to the extent they are not satisfied before the plan effective date;

• Holders of senior notes claims will receive new notes and 100% of the new common stock in the reorganized company; and

• Equityholders will receive their share of $2.9 million in cash.

Caraustar is an Austell, Ga.-based manufacturer of recycled paperboard and converted paperboard products. Its Chapter 11 case number is 09-73830.

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