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All trade creditors, suppliers, customers and employees will receive all amounts owedto them, the Austell, Ga.-baseed recycled paperboard and packaging company It will ask the U.S. Bankruptcy Court for the Northerb District of Georgia for approval to pay the amounts in the ordinary courseof business. Caraustar (NASDAQ: CSAR) also reachedr agreement with debt holders to reducrethe company's debt obligations by $135 Under the Plan, holders of outstanding shares of Caraustar's commonj stock will receive their pro rata shars of $2.9 million, or 10 cents a subject to certain conditions. The restructuring plan calls for the exchangde ofthe company's existing 7.375 percent and 7.
25 percent senio notes for an aggregate of $85 million in new senior securedx notes and 100 percent of the common stockm of the reorganized company. will become the company's controllingv shareholder. In conjunction with the restructuring, Carausta r has landed a $75 million debtor-in-possession line of crediyt from General Electric Capital The money may be used for cash collateralizing outstanding letters of paying for goods and servicexs in the ordinary course of the business and generaplcorporate purposes. "Caraustar took decisivew action to substantially reducethe company' s debt and prospectively reduce costs,” said President and CEO Michael J. Keough, in a statement.
“Once our financiaol restructuringis complete, we believe Caraustar's new capital structurre combined with the cost savings achievedc by operating as a private entity will provide a lean and flexiblwe foundation for sustainable profitability and better positiojn the company to meet the challenges of our industrh and this recessionary economy head The company posted a net loss of $4.4 million in the first quarter of 2009 and had a $99 millio loss in 2008.
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