Bloomberg News

Constar Wins Court Approval of $113.6 Million in Asset Sales (1)

February 10, 2014

Constar International Holdings LLC, a maker of plastic soda bottles, won bankruptcy court approval of three asset sales totaling about $113.6 million, including a sale of the majority of its assets to Plastipak Packaging Inc. for about $102.5 million.

U.S. Bankruptcy Judge Christopher Sontchi in Wilmington, Delaware, today granted the company permission to sell its U.S. and U.K. assets including real estate in Havre De Grace, Maryland, to the winners of a bankruptcy auction held last week.

“We just had a remarkable auction,” Brian E. Greer, a lawyer for Constar, told the judge. In 29 rounds of bidding, the sale price for the U.S. assets rose about $34 million, or almost 50 percent, from Amcor Rigid Plastics USA Inc.’s initial bid of $68.5 million.

J.M. Smucker Co. will acquire the Havre De Grace property for about $3.1 million, according to court documents.

Greybull Capital LLP made an offer valued at $11.1 million for all of the company’s assets in the U.K. and the Netherlands. Greybull will purchase the U.K. assets in a deal that Greer said is valued at about $8 million plus the assumption of certain liabilities. Constar didn’t seek court approval to sell the Holland assets as it continues to work on that part of the sale.

The plastic-bottle maker sought bankruptcy for the third time in December. It previously filed for court protection in 2008 and 2011. Those bankruptcies resulted in its creditors’ taking ownership through pre-arranged reorganization plans swapping debt for equity.

Financing Lack

Constar, based in Trevose, Pennsylvania, blamed this bankruptcy on lack of financing, while the first was caused by the recession and the second followed the decision of its biggest customer, PepsiCo Inc. (PEP:US)’s Pepsi-Cola Advertising & Marketing Inc., to manufacture its own containers.

The case is In re Constar International Holdings LLC, 13-bk-13281, U.S. Bankruptcy Court, District of Delaware (Wilmington). The second case is In re Constar International Inc., 11-10109, U.S. Bankruptcy Court, District of Delaware (Wilmington). The first bankruptcy was In re Constar International Inc., 08-bk-13432, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at mbathon@bloomberg.net.

To contact the editor responsible for this story: Andrew Dunn at adunn8@bloomberg.net.


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