Erie Plastics Corp. plans to reorganize while creditors work to finalize a sale.
The Corry, Pa., firm Sept. 29 for Chapter 11 bankruptcy protection. The action should allow Erie to eliminate a significant portion of its debt, the company said in a Sept. 30 news release.
``After reviewing all of our alternatives, the company's management and ownership, working alongside outside legal and financial advisers, has determined that this action will provide the best results for our creditors, suppliers, employees and customers,'' the release said.
Chapter 11 ``will pave the way for a bidder or bidders to submit proposals to acquire the assets of Erie Plastics and continue the ongoing operations.''
Erie Chairman Hoop Roche said the bankruptcy protection is unrelated to the bidding process for Erie's assets. He said he could not comment on potential bidders that may be in talks with Erie's creditors. Roche confirmed Sept. 22 that Crawford Group of Cleveland was negotiating to buy Erie.
Roche said creditors stand to gain from the Chapter 11 process.
``Creditors will know they will be paid going forward,'' Roche said in a telephone interview. ``Unsecured creditors should get some settlement and secured creditors should get a good settlement.''
Roche declined to reveal Erie's debt load. Its major secured creditor is J.P. Morgan Chase.
Erie is operating normally, according to Roche. With a recently approved labor contract, it is more competitive and able to pursue growth opportunities, the firm stated.
Erie custom injection molds rigid, thin-wall packaging for a variety of industries. Its production plants are in Corry and in Hungary. It specializes in high-cavitation molding and high-speed molding.