TORONTO-Plastics recycler Resource Plastics Inc. of Brantford, Ontario, will hold a creditors' meeting Jan. 15 to vote on a proposal to restructure the firm. Resource has signed a letter of intent to be acquired by SCL, a subsidiary of an undisclosed public Canadian firm, said Wes Treleaven, senior vice president of Deloitte & Touche Inc. of Toronto, Resource's trustee.
Treleaven said Resource's plan ``is an opportunity for creditors to get something and for the company to continue operating.'' He would not elaborate.
Creditors were to receive an information package by Dec. 29.
The polyethylene film and bottle recycler was protected from creditors while it sought a strategic buyer to help it restructure. Its debts include about C$7 million (US$5.2 million) owed to secured creditors and about C$2.1 million (US$1.6 million) due to scrap plastic suppliers, equipment dealers and a host of other unsecured creditors. Treleaven did not disclose Resource's assets but said they are worth much less than the value of liabilities.
Resource was earlier scheduled to file a proposal by Nov. 27 but received a court extension to Dec. 15. If creditors turn down its restructuring proposal, the court would automatically deem Resource to be bankrupt, explained Treleaven.
Resource announced Sept. 29 that it was seeking a buyer. Fifteen days earlier it notified the court that it planned to file a proposal to restructure under Part III of Canada's Bankruptcy and Insolvency Act, similar to Chapter 11 of the U.S. Bankruptcy Code. Resource's secured creditors include Royal Bank of Canada, other financial institutions and several shareholders.