Under Anchor Glass Container Corporation“s recently filed bankruptcy-reorganization plan, unsecured creditors will be paid only about 7% of their claims. According to the proposals, unsecured credito…
Under Anchor Glass Container Corporation“s recently filed bankruptcy-reorganization plan, unsecured creditors will be paid only about 7% of their claims. According to the proposals, unsecured creditors will receive payments totaling USD 8.6 million to settle USD 120 million in claims they have filed against the company. The payment will be deposited into a trust. Some secured lenders will also not obtain a full recovery, according to a disclosure statement filed 30 December 2005 with the US Bankruptcy Court in Tampa, Florida. Lenders with senior-note claims will receive a percentage of new company stock to fulfill their USD 368.3 million in claims. Under the proposal, if a lender“s claim exceeds the value of the stock they received, the company will grant a secured claim to satisfy the debt. If the claim is still unsatisfied, the lender will receive an unsecured claim entitling it access to the trust. In a press release, Anchor Glass said senior secured noteholders would be compensated through a debt-for-equity swap. In the disclosure statement, the company listed these creditors as impaired because the value of the equity is uncertain. Anchor Glass said it would fund the proposed reorganization through a USD 50 million revolving credit facility, a USD 125 million new term loan and new stock. The disclosure statement, which explains the terms of the Chapter 11 plan in non-legal language, must be approved by the court before creditors are given the chance to vote on the proposals. A hearing on the disclosure statement is scheduled for 26 January 2006. If the plan is confirmed, the company said it plans to emerge from bankruptcy in March 2006. Anchor Glass, based in Tampa, manufactures glass containers for companies such as Anheuser-Busch Cos. The company“s 4 August 2005 Chapter 11 filing was its third in a decade.