Plastic Bag Manufacturer Hilex Poly Files Bankruptcy Petition, Seeks Approval of Prepack
Hilex Poly Co. LLC, which touts itself as the word's largest manufacturer of plastic bags, has filed a petition for relief under Chapter 11 of the United States Bankruptcy Code. The debtor filed the petition on May 6, 2008 in the United States Bankruptcy Court for the District of Delaware. The Honorable Kevin J. Carey is presiding over this case.
At the first day hearings in the case, Judge Carey granted interim approval of over $140 million in debtor-in-possession financing from prepetition lenders who include GE Capital Corp., Morgan Stanley Senior Funding, Inc. and others. Judge Carey set a final hearing on this financing plan for May 27, 2008.
The debtor is proposing a prepackaged plan of reorganization under which existing equity would be wiped out. Under the proposed plan, a new company, to be called Hilex Poly Investors Corp., would be created, with all equity in the new entity divided among the debtor's first and second lien holders. While first lien holders will be made whole under the proposed plan, second lien holders will realize forty (40) cents on each dollar. General unsecured claims are anticipated to pass through the case unaffected, and are proposed to be paid in the ordinary course by the new company. On May 7, 2008, Judge Carey scheduled a plan confirmation hearing for June 12, 2008 at 10:00 a.m.
