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All trade creditors, suppliers, customers and employees will receiver all amounts owedto them, the Ga.-based recycled paperboard and packaging compangy said. It will ask the U.S. Bankruptcy Court for the Northern District of Georgia for approva l to pay the amounts in the ordinarty courseof business. Caraustar (NASDAQ: also reached agreement with debt holdere to reducethe company's debt obligations by $135 Under the Plan, holderds of outstanding shares of Caraustar's commo n stock will receive their pro rata share of $2.9 or 10 cents a share, subjectt to certain conditions. The restructurinfg plan calls for the exchangre ofthe company's existing 7.375 percent and 7.
25 percen senior notes for an aggregate of $85 milliom in new senior secured notes and 100 percentt of the common stock of the reorganized company. will becom the company's controlling shareholder. In conjunction with the Caraustar has landeda $75 million debtor-in-possessionh line of credit from Genera l Electric Capital Corp. The money may be used for cash collateralizing outstandinfg lettersof credit, paying for goods and services in the ordinaryu course of the business and general corporatre purposes. "Caraustar took decisive action to substantiallyu reducethe company's debt and prospectively reduce costs,” said President and CEO Michael J.
Keough, in a “Once our financial restructuringis complete, we believr Caraustar's new capital structure combined with the cost savingd achieved by operating as a private entity will provide a lean and flexible foundation for sustainabls profitability and better position the company to meet the challengez of our industry and this recessionary economy head on." The compan posted a net loss of $4.4 million in the first quarter of 2009 and had a $99 million loss in 2008.
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