Pliant Completes Plan of Reorganization

On July 18, 2006, Pliant Corporation, a leading manufacturer of value-added films and flexible packaging for food, medical and industrial applications, successfully completed a plan of reorganization less than seven months after Pliant and 10 of its subsidiaries filed for protection under Chapter 11 of the United States Bankruptcy Code. The restructuring of the Pliant Group, which collectively had liabilities in excess of US$1 billion, was completed through a cross-border proceeding whereby a plan of reorganization was approved in the Chapter 11 proceeding and subsequently recognized in Canada under the Companies' Creditors Arrangement Act.
The restructuring involved, among other things, the compromise of US$320 million of Pliant's senior subordinated notes, in exchange for a combination of new preferred and common shares and new senior subordinated notes, the exchange of US$289 million of Pliant's redeemable preferred shares for a combination of preferred and common shares in the newly reorganized Pliant, and the payment of certain additional consideration, including a lump sum payment of US$4 million, to Pliant's noteholders. The claims of all trade and other general unsecured creditors were paid in full.
As part of the restructuring, Pliant entered into certain exit financing facilities, with a combined maximum exposure of US$200 million, including a revolving working capital credit facility and a revolving fixed asset-based credit facility both provided by Merrill Lynch Bank USA, as administrative agent and Merrill Lynch Commercial Finance Corp., as sole lead arranger and book manager.
McMillan Binch Mendelsohn LLP acted as Canadian bankruptcy counsel to the Pliant Group, with a team led by Jeffrey Gollob that included Adam Maerov and Tushara Weerasooriya (restructuring); Paul Macdonald and Lisa Brost (litigation); Bill Woloshyn (debt products); Wayne Gray and Michael Hollinger (corporate); Todd Miller and Michael Friedman (tax) and David Elenbaas (labour and employment).
The Pliant Group was represented in the United States by Stephen Auburn, vice-president and general counsel and by Sidley Austin LLP, as lead bankruptcy counsel, with a team led by Larry Nyhan and James Conlan, which included William Evanoff, Jessica Knowles and Laura Franzon (corporate reorganization and bankruptcy) and Michael Gold and Carla Varner (banking/commercial finance). Young Conaway Stargatt & Taylor, LLP represented the Pliant Group, as local Delaware counsel, with a team led by Robert Brady that included Edmon Morton and Kenneth Enos.
With respect to the pre-filing and exit financing credit facilities, the Pliant Group was represented in Canada by Fasken Martineau DuMoulin LLP, with a team in Toronto led by Andrew Laidlaw (banking); Mark Stinson (corporate) and Paul King (real property) and a team in Vancouver led by Don Weaver (banking). Charles Reagh of Stewart McKelvey in Nova Scotia also acted as local counsel for the Pliant Group in relation to the credit facilities.
In connection with the exit financing, Andrew Yoon and Douglas Urquhart of Weil, Gotshal & Manges LLP acted as US lead counsel for Merrill Lynch, and Blake, Cassels & Graydon LLP acted as Canadian counsel to Merrill Lynch, in connection with the exit financing, with a team that consisted of Simon Finch, Steven Weisz and Lauren Temple.