Recycler Covenant Plastics files for reorganization

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Covenant Plastics Inc. Covenant Plastics Inc.'s president says the recycling firm will re-emerge from Chapter 11 bankruptcy protection.

Recycling firm Covenant Plastics Inc. filed for Chapter 11 protection from creditors on March 9.

Covenant President Prentice Tillman told Plastics News that his firm will continue to operate and plans to come out of bankruptcy as "a bigger, better and stronger company."

Houston-based Covenant listed debts of more than $4 million and assets of just over $3 million in the filing in U.S. Bankruptcy Court in Houston. The firm posted sales of about $2.5 million in 2016 and of just under $2 million in 2015, according to court records.

Covenant was founded in 1995. The firm offers recycled resins and related products in regrind and reprocessed forms. It also resells virgin resins.

Prentice said by phone March 17 that lower selling prices for recycled materials were part of the reason for the filing, but that procurement also played a role.

"There's not a tremendous amount of recycled raw material out there right now, at least not for companies like ours," he added.