Bankruptcy & Corporate Reorganization
In early January 2009, The Wall Street Journal announced that Smurfit-Stone had hired lawyers to plan for a potential bankruptcy filing - which caused an 83% collapse of Smurfit-Stone's stock price. On January 27, 2009, Smurfit-Stone filed petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court in Wilmington, Delaware.
The company's CEO claims Smurfit-Stone was forced to file bankruptcy because of higher operations costs, burdensome debt levels from prior corporate mergers, and weakened demand for packaging caused by a global economic recession. Pending court approval, the company hopes to obtain debtor-in-possession (DIP) financing to continue ongoing business operations, payment of employee wages and benefits, and payment of existing vendor obligations.
Read more about this topic: Smurfit-Stone Container
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