Caraustar Industries Inc. has announced that the Bankruptcy Court for the Northern District of Georgia has approved the company’s first-day motions to pay pre-petition general unsecured claims in the ordinary course of business in connection with its voluntary restructuring under Chapter 11.

As previously announced, Caraustar reached agreement with holders of approximately 83 percent of its 7⅜% Senior Notes maturing June 1, 2009, and 91 percent of its 7¼% Senior Notes maturing May 1, 2010 on the terms of a cooperative financial restructuring that would reduce the company’s debt obligations by approximately $135 million. 

The court also granted permission for the company to pay pre-petition employee wages and salaries, to make contributions to the 401(k) and other employee benefit plans, and to reimburse employees for their pre-petition business expenses.  

“Having received approval of our first-day motions so quickly sets Caraustar on strong footing as we move towards completing our recapitalization,” said Caraustar President and Chief Executive Officer Michael J. Keough. “This action by the Court will be well received by our employees, customers and suppliers.”

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