Newark Group Files Bankruptcy Protection

The paper company Newark Group has filed for voluntary Chapter 11 in the U.S. Bankruptcy Court in Newark, N.J. The company is seeking court approval of its prepackaged plan of reorganization.

In a release, the Newark Group says that its two impaired creditor classes voted in favor of the plan by greater than 90 percent. The two impaired equity interests also voted in favor of the plan by greater than 90 percent. The court is expected to hold a hearing on July 30, 2010 to consider confirmation of the plan, and the company hopes to exit Chapter 11 shortly thereafter.

Along with approving 11 first-day motions, the court also approved the company’s application for debtor in possession (DIP) financing. The court also approved the company's motion to pay all prepetition vendors in full in the ordinary course.

"We are pleased to have the support of our note holders and lenders as we move forward to strengthen our balance sheet and position the company for profitability," says Robert Mullen, Newark Group’s president and CEO. "As we navigate this process, we will continue to focus on customers, servicing them better than anyone else and developing product solutions to address their most difficult issues."

None of the company's non-U.S. subsidiaries or affiliates were included in the filing.