Pliant files plan of reorganization; noteholders to receive $35 million debt, 30% of stock, preferreds

By Caroline Salls

Pittsburgh, March 20 - Pliant Corp. filed its plan of reorganization and related disclosure statement Friday with the U.S. Bankruptcy Court for the District of Delaware, under which noteholders will receive debt, stock and preferreds while the remaining stock will be distributed to holders of the company's old preferreds and equity holders.

Under the terms of the plan, holders of Pliant's $320 million of 13% senior subordinated notes will receive up to $35 million in new debt in consideration for accrued interest that was payable on Dec. 1, and can exchange all of their notes for a combination of 30% of the reorganized company's common stock and at least $260 million of a newly issued series AA redeemable preferred stock, which will not be subject to mandatory redemption.

In addition, holders of Pliant's $278 million of mandatorily redeemable preferred stock will exchange all of their stock for a combination of up to $75.5 million of a new series AA redeemable preferred stock and a percentage of the reorganized company's common stock to be determined.

New Pliant will issue shares of new common stock, of which 30% will be distributed to holders of old note claims, 28% to holders of series A preferred stock interests and 42% to holders of outstanding common stock.

New Pliant will also issue 335,600 shares of series AA preferred stock.

The company will also issue either $20 million in new tack-on notes or $35 million of new 13% senior subordinated notes due 2010.

The tack-on notes will be issued for distribution to old noteholders unless the court determines that the first- or second-lien note claims are impaired.

Treatment of creditors under the plan will include:

• Holders of Pliant's $320 million of 13% senior subordinated notes will receive up to $35 million in new debt in consideration for accrued interest that was payable on Dec. 1 and can exchange all of their notes for a combination of 30% of the reorganized company's common stock and at least $260 million of a newly issued series AA redeemable preferred stock.

• Holders of $7.4 million in other secured claims, $137.6 million in revolving credit facility claims, $294.5 million in first-lien note claims, $273.7 million in second-lien note claims and $24.5 million in general unsecured claims will have their claims reinstated.

• Holders of series A preferred stock interests will receive a share of the series A/series AA preferred stock and the series A common stock.

• Holders of series B preferred stock interests will receive $5,146 per share in cash, provided that the holder is eligible to participate in the management stock plan or deferred cash incentive plan.

All unvested series B preferred stock interests will be canceled and holders will receive no distribution.

• Holders of outstanding common stock interests will receive their share of new common stock in the reorganized company.

Pliant said it plans to obtain a two-year $140 million exit facility, including a $25 million sublimit for letters of credit.

A hearing on approval of the disclosure statement is scheduled for April 18.

Pliant is a Schaumburg, Ill., producer of film and flexible packaging products. Its Chapter 11 case number is 06-10001.

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