SP Newsprint Holdings LLC 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.
SP Newsprint is owned by newsprint magnate and art collector Peter Brant.
"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.
