Film extruder Plassein International Corp. filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code on May 14.
The Willington, Conn., company filed in U.S. Bankruptcy Court in Wilmington, Del.
According to sources, Plassein has been looking to sell part of its business to pay down debt, which according to the filing is in excess of $100 million to more than 1,000 creditors.
President and Chief Executive Officer V.M. Philbrook and Adam Landis, the lawyer representing Plassein, could not be reached for comment.
Thomas Blaige, managing director of Lincoln Partners LLC, a Chicago-based equity firm that specializes in plastics and packaging, said three overriding factors led Plassein to this filing. First, he said the six companies underneath Plassein became tough to manage.
``It was very difficult to integrate them and get them moving in the same direction,'' he said.
Second, he said the firm was a victim of the ``business bubble.'' Rising resin prices, foreign competition, and other ``operational challenges'' conspired against Plassein.
Finally, the ``tremendous leverage'' Plassein faced presented challenges, Blaige said.
``On top of that, you have debt payments and banks breathing down your neck,'' he said. ``Customers won't let you raise prices and banks don't have as much flexibility.''
Owned by Miami-based equity firm Trivest Inc., Plassein was formed in 1999 via a leveraged buyout of five film companies. The company added a sixth film company, Rex International Inc., in 2000.
Prior to the Chapter 11 filing, sources said Plassein had been looking to sell Thomasville, N.C.-based Rex, which generates annual sales of about $65 million. Plassein's other five units each generate less than $20 million.
Spread from California to New Hampshire, Plassein's plants make specialty film, shipping and T-shirt bags and food packaging.
Plassein shifted its management last year. Philbrook, a former executive with Huhtamaki Oyj's consumer packaging division, was hired to replace Frank McNabb, who retired from daily operations but remained as vice chairman.