GREENWICH, Conn.--(BUSINESS WIRE)--SP Newsprint Holdings LLC (“SP Newsprint” or the “Company”) and its subsidiaries today announced that they each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The Company intends to use the bankruptcy process to explore options to continue its business as a going concern.
“As a result of weak economic conditions coupled with record prices for key raw materials the Company’s profit margins have been reduced to levels that are not able to support servicing of current outstanding debt. Therefore, the Company is seeking court protection to maximize going concern value in an orderly manner,” said Ed Sherrick, Chief Financial Officer.
The Company is in the process of negotiating debtor-in-possession (DIP) financing with certain of its lenders and agreed upon use of cash collateral in the interim, which is expected to provide liquidity during the restructuring process. In connection with today’s filings, the Company is requesting customary relief to support its customers and employees as the Company explores its options.
SP Newsprint is seeking to retain Cahill Gordon & Reindel LLP and Richards, Layton & Finger as legal counsel.
Information about the SP Newsprint restructuring is available at the Company’s restructuring website, www.gcginc.com/cases/snp or via the Company’s restructuring information line at 1-888-290-4881.
About SP Newsprint Holdings LLC: SP Newsprint Co. (“SP”), a Georgia company and the Debtors’ main operating company, is one of the largest producers of newsprint in North America. SP Recycling Corporation (“SPRC”), a Georgia corporation and the Debtors’ other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint.