By Jacqueline Palank
Of DOW JONES DAILY BANKRUPTCY REVIEW
Constar International Inc. (CNST), which makes plastic
containers for the food and beverages industries, filed for Chapter
11 bankruptcy protection Tuesday.
The Philadelphia company said in court papers that it struck a
deal as to key terms of its restructuring with certain
noteholders.
Constar said it secured a pledge from those noteholders, led by
Black Diamond Commercial Finance LLC, to purchase $55 million in
new senior secured notes to fund Constar's operations as it
restructures. The company said it also aims to use the note sale
proceeds to terminate and repay obligations under its existing
credit facility from General Electric Capital Corp.
In its bankruptcy petition, filed with the U.S. Bankruptcy Court
in Wilmington, Del., Constar reported assets and debts each in the
range of $100 million to $500 million.
Affiliate Constar Inc., one of several affiliates that joined
Constar in Chapter 11 protection, reported in its bankruptcy
petition assets in the range of $500 million to $1 billion and
debts in the range of $100 million to $500 million.
Last fall, Constar announced plans to consolidate operations by
closing plants in Florida and Kansas and reducing its
1,074-employee work force by nearly 25%. The company was
unprofitable since exiting a prior Chapter 11 proceeding in May
2009.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection.)
-By Jacqueline Palank, Dow Jones Daily Bankruptcy Review;
202-862-6615; jacqueline.palank@dowjones.com