Anchor Glass: court rules on extension to exclusivity

A court in Tampa, Florida has granted Anchor Glass Container Corp. a 90-day extension to the firm“s exclusive control over its Chapter 11 case even though the firm has already filed its reorganizati…

A court in Tampa, Florida has granted Anchor Glass Container Corp. a 90-day extension to the firm“s exclusive control over its Chapter 11 case even though the firm has already filed its reorganization plan. In an order signed 11 January 2006, Judge Alexander L. Paskay of the US Bankruptcy Court in Tampa gave the company more time to lobby creditors to accept its reorganization plan, which was filed on 30 December 2006. Bankruptcy law requires companies operating under Chapter 11 to submit a plan outlining how creditors will be paid. Exclusive periods prevent other parties from submitting plans to the court and allow the company to keep control of the restructuring process without outside interference. Anchor Glass“ exclusive period to win support for its Chapter 11 plan was originally scheduled to end 5 February 2006. The company now has through early May 2006 to win confirmation of the reorganization plan. The reorganization plan offers unsecured creditors a recovery of about 7% on their claims. Secured lenders would receive new company stock in a debt-for-equity swap. Anchor glass needs court approval of its disclosure statement, which explains the terms of the plan in non-legal language, before the company can send it to creditors for a vote. A hearing on the statement is scheduled for 26 January 2006. Anchor Glass, based in Tampa, makes glass containers for companies such as Anheuser-Busch Cos. Anchor filed for Chapter 11 bankruptcy protection on 4 August 2005, its third filing in a decade. The company has said it hopes to emerge from bankruptcy in March 2006.