================================================================= PLIANT BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2006 (ISSN XXXX-XXXX) January 5, 2006 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 215-945-7000 FAX 215-945-7001 ----------------------------------------------------------------- PLIANT BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 572 Fernwood Lane, Fairless Hills, Pennsylvania 19030, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' cases. New issues are prepared by Carlo B. Fernandez, Ivy B. Magdadaro, Christopher G. Patalinghug, Frauline S. Abangan and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re-mailing of PLIANT BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO PLIANT BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF PLIANT CORPORATION [00002] PLIANT CORPORATION'S BALANCE SHEET AS OF SEPT. 30, 2005 [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING [00004] PLIANT CORPORATION'S CHAPTER 11 DATABASE [00005] LIST OF PLIANT CORP.'S 30 LARGEST UNSECURED CREDITORS [00006] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES [00007] PLIANT RECEIVES COURT APPROVAL OF FIRST DAY MOTIONS [00008] MOODY'S WITHDRAWS RATINGS ON PLIANT CORPORATION [00009] S&P LOWERS PLIANT CORP.'S RATINGS TO 'D' KEY DATE CALENDAR ----------------- 01/03/06 Voluntary Petition Date 01/23/06 Deadline to Provide Utilities With Adequate Assurance 02/02/06 Deadline to File Schedules of Assets & Liabilities 02/02/06 Deadline to File Statements of Financial Affairs 02/02/06 Deadline to File Lists of Leases and Contracts 04/03/06 Deadline to remove actions under FRBP 9027 05/03/06 Deadline to make decisions about lease depositions 05/03/06 Expiration of Exclusive Plan Proposal Period 07/02/06 Expiration of Exclusive Solicitation Period 01/03/08 Deadline to Commence Avoidance Actions Organizational Meeting to Form Creditors' Committees First Meeting of Creditors under 11 USC Sec. 341 Bar Date for filing Proofs of Claim ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO PLIANT BANKRUPTCY NEWS ----------------------------------------------------------------- PLIANT BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. 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Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) PLIANT BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' chapter 11 proceedings. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of PLIANT BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF PLIANT CORPORATION ----------------------------------------------------------------- Pliant Corporation 1475 Woodfield Road, Suite 700 Schaumburg, IL 60173 Telephone: (847) 969-3300 http://www.pliantcorp.com/ Pliant Corporation and its affiliates are among North America's leading manufacturers of value-added films and flexible packaging for food, personal care, medical, agricultural and industrial applications. Through its four operating groups, the Company supplies numerous industries in North America with more than 20% of their film and film packaging needs. Pliant's four operating segments are: (a) "Specialty Products Group," which produces personal care films, medical films and agricultural films; (b) "Industrial Films," which produces stretch and PVC films; (c) "Engineered Films," which produces films that are sold to third-party converters of flexible packaging; and (d) "Performance Films," which produces a variety of barrier and custom films. Annually, Pliant produces four billion bread and bakery bags (20% of North America's total usage); 20% of cookie, cracker and cereal box liners; and more than 35% of the personal care films used in disposable diapers, feminine care products and adult incontinence products. The Company is also a specialized manufacturer of medical films, which are used in disposable surgical drapes and gowns, as well as protective packaging for medical supplies. The Company operates 20 manufacturing and research and development facilities in the U.S. and Canada. It currently has approximately 1 billion pounds of annual production capacity. Pliant also has affiliates that operate facilities in Australia, Mexico and Germany. In fiscal year 2004, the Company recorded $968,700,000 in net sales. For the nine months ending September 30, 2005, the Company recorded net sales of $784,000,000, which represents an increase of $69 million during the first nine months of 2005 as compared to the same period in 2004. As of the Petition Date, the Company employs approximately 3,000 employees worldwide. Of this number, approximately 2,465 are employed by the Company directly. Approximately 1,820 of the Employees are hourly Employees and approximately 590 are salaried Employees. Moreover, approximately 569 of the Employees are subject to one of six collective bargaining agreements. In addition, the Company also contract for approximately 43 temporary hourly positions. According to Harold C. Bevis, chief executive officer of Pliant Corporation, Pliant has never experienced any significant work stoppages and considers its current relations with its employees to be good. Due to the Company's broad range of product offerings and customers, its sales and marketing efforts are generally product or customer specific. The Company manufactures its film products using both blown and cast extrusion processes. In each process, thermoplastic resin pellets are combined with other resins, plasticizers or modifiers in a controlled, high temperature, pressurized process to create films with specific performance characteristics. Corporate History and Structure Huntsman Corporation, known today as Pliant Corporation, was founded in 1992. Following a series of mergers and acquisitions, as well as name changes, the Company changed its name to Pliant Corporation in October 2000. Pliant is the ultimate parent of a number of companies and foreign corporations. A full-text of Pliant's corporate organization chart is available for free at: http://bankrupt.com/misc/pliant_structure.pdf On May 31, 2000, Pliant Corporation consummated a recapitalization pursuant to an agreement dated March 31, 2000, among Pliant Corporation, its then existing stockholders and an affiliate of J.P. Morgan Partners LLC, whereby the affiliate of J.P. Morgan Partners LLC acquired majority control of Pliant Corporation's common stock. The total consideration paid in the recapitalization was approximately $1.1 billion, including transaction costs. As of August 22, 2005, J.P. Morgan Partners (BHCA), LP, and affiliates owned approximately 55% of the Company's outstanding common stock, 74% of its detachable warrants to purchase common stock issued in connection with its Series A preferred stock and 59% of its outstanding Series A preferred stock. Following the recapitalization in 2000, the Company made some key acquisitions. Pliant acquired Uniplast Holdings, Inc. in 2001. The next year, the Company acquired Decora Industries (now named Pliant Solutions Corp.) and Roll-O-Sheets. The Company also made several key divestitures. In September 2004, Pliant sold substantially all of the assets of Pliant Solutions Corp., for $9,000,000. As a result of the sale, the Company reorganized its operations into four operating segments. In April 2005, the Company sold the intellectual property, working capital, and equipment assets associated with the operations of one of its subsidiaries, Alliant, to an independent third party for the purchase price of $6,300,000. Road to Bankruptcy Mr. Bevis relates that the Company experienced severe contraction in trade terms from their essential raw material suppliers in the past few months. "This contraction of trade terms has ranged from severe tightening of payment periods to placing the [Company] on cash in advance payment terms. Some of these essential vendors have threatened to shut off shipments to the [Company] where the [Company has] resisted the contract trade terms. The actions of these trade vendors have severely impacted the [Company's] liquidity." Pliant has also faced challenging industry conditions, Mr. Bevis says, namely the increase in the price of raw materials. "The principal raw materials used by the [Company] for [its] products are polyethylene, PVC and polypropylene, which are petrochemical products, and therefore their price and availability is linked closely to the market supply of crude oil and natural gas. The cost of these Resins constituted nearly two-thirds of the [Company's] total manufacturing costs in the first half of 2005." Moreover, Mr. Bevis adds, Hurricane Katrina and Hurricane Rita have triggered severe increases in the price of those Resins and have tightened availability. The steady deterioration of Pliant's liquidity position has forced the Company to seek Chapter 11 protection while they restructure its balance sheet. Restructuring Agreement On December 28, 2005, the Company disclosed to the Securities and Exchange Commission that it had entered into Support Agreements with the holders of more than 66-2/3% of its 13% Senior Subordinated Notes, the holders of a majority of the outstanding shares of its mandatorily redeemable preferred stock and the holders of a majority of the outstanding shares of its common stock. A full-text copy of the Support Agreement is available for free at http://ResearchArchives.com/t/s?42d Pursuant to the Support Agreement, the holders agreed to support Pliant's proposed financial restructuring. Under the terms of the Restructuring: (i) $320 million of the Company's 13% Senior Subordinated Notes would be exchanged for a combination of 30% of its common stock, at least $260 million of a new Series AA Redeemable Preferred Stock, which will not be subject to mandatory redemption, and up to $35 million of new debt; and (ii) $278 million of the Company's mandatorily redeemable preferred stock would be exchanged for a combination of up to $75.5 million of a new Series AA Redeemable Preferred Stock and a percentage of its common stock to be determined. Completion of the Restructuring is subject to a number of conditions, including completion of definitive documentation. The common and preferred stockholders that signed the Support Agreements are: (i) Southwest Industrial Films, LLC, which owns approximately 55% of the Company's outstanding common stock and currently has the right under a stockholders' agreement to appoint a majority of Pliant's directors, and (ii) Flexible Films, LLC, and Flexible Films II, LLC, which collectively own approximately 59% of the Company's outstanding preferred stock. Southwest Industrial Films, LLC, Southwest Industrial Films II, LLC, Flexible Films, LLC, and Flexible Films II, LLC, are subsidiaries of J.P. Morgan Partners (BHCA), L.P. Timothy J. Walsh and Jeffrey Walker, who serve on the Company's board of directors, are partners of J.P. Morgan Partners, LLC and Stephen McKenna, who also serves on Pliant's board of directors, is a principal of J.P. Morgan Partners, LLC. J.P. Morgan Partners, LLC serves as investment advisor to J.P. Morgan Partners (BHCA), L.P. and JPMP Capital Corp. JPMP Capital Corp. is a subsidiary of JPMorgan Chase & Co. and is the general partner of JPMP Master Fund Manager, L.P., which is the general partner of J.P. Morgan Partners (BHCA) L.P. Messrs. Walsh and Walker are executive officers of JPMP Capital Corp. and limited partners of JPMP Master Fund Manager, L.P. The Company intends to complete the Restructuring through the Chapter 11 process. Canadian Proceedings Uniplast Industries Co., Pliant Corporation of Canada Ltd., and Pliant Packaging of Canada, LLC, will seek recognition of their Chapter 11 proceedings in a Canadian court as "foreign proceedings" pursuant to Section 18.6 of the Companies' Creditors Arrangement Act, as amended. Specifically, the Canadian companies will seek the Canadian Court's recognition of the U.S. Bankruptcy Court's jurisdiction over the Canadian companies because: (i) there is a sufficient degree of interdependence between the businesses of the Canadian companies and Pliant Corporation and its U.S. affiliates; and (ii) the stakeholders of the Canadian companies will have an opportunity to have their claims dealt with in the U.S. Proceedings. In addition to staying proceedings against the Canadian companies in Canada, a recognition by the Canadian court will allow certain orders of the U.S. Bankruptcy Court to be in full force and effect in the same manner and in all respects as if they had been made by the Canadian court. Mr. Bevis relates that the businesses and operations of the Canadian companies are integral to the overall businesses of Pliant Corporation and its affiliates, and efforts to restructure Pliant will necessarily involve the Canadian companies and be conducted on a global basis. In addition, the Canadian companies have integrated management and financing in common with all of Pliant and its affiliates, as well as sharing a number of key suppliers and creditors. ----------------------------------------------------------------- [00002] PLIANT CORPORATION'S BALANCE SHEET AS OF SEPT. 30, 2005 ----------------------------------------------------------------- Pliant Corporation and Subsidiaries Condensed Consolidated Balance Sheet As of September 30, 2005 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $6,949,000 Receivables, net of $6,088,000 allowance 131,320,000 Inventories 91,266,000 Prepaid expenses and other 5,023,000 Income taxes receivable, net 1,388,000 Deferred income taxes 9,490,000 --------------- Total current assets $245,436,000 --------------- PLANT AND EQUIPMENT, net $293,384,000 GOODWILL 182,245,000 INTANGIBLE ASSETS, net 15,384,000 OTHER ASSETS 39,855,000 --------------- TOTAL ASSETS $776,304,000 =============== LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Trade accounts payable $101,278,000 Accrued liabilities: Interest payable 16,126,000 Customer rebates 7,844,000 Other 40,163,000 Current portion of long-term debt 1,355,000 --------------- Total current liabilities $166,766,000 --------------- LONG-TERM DEBT, net of current portion $885,630,000 OTHER LIABILITIES 28,725,000 DEFERRED INCOME TAXES 29,438,000 SHARES SUBJECT TO MANDATORY REDEMPTION 258,908,000 --------------- Total Liabilities $1,369,467,000 --------------- MINORITY INTEREST - REDEEMABLE PREFERRED STOCK - Series B $104,000 REDEEMABLE COMMON STOCK 6,645,000 STOCKHOLDERS' DEFICIT: Common stock - no par value 103,376,000 Warrants to purchase common stock 39,133,000 Accumulated deficit (727,954,000) Stockholders' notes receivable (660,000) Accumulated other comprehensive loss (13,807,000) --------------- Total stockholders' deficit ($599,912,000) --------------- TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT $776,304,000 =============== ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- Company Will Seek Expedited Completion of Financial Restructuring Transaction Has Approval of More Than Two-Thirds of Senior Subordinated Noteholders and Majority of Preferred and Common Stock Holders Debtor-In-Possession Financing Commitment from GE Commercial Finance To Support Continued Operations SCHAUMBURG, Illinois -- January 3, 2006 -- Pliant Corporation announced today that, in order to complete a financial restructuring that will significantly reduce debt and annual interest expense, the Company and certain of its subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The filings were made today in the U.S. Bankruptcy Court for the District of Delaware. Pliant expects to continue to operate in the normal course of business during the reorganization process. All of the Company's 24 manufacturing and research and development facilities around the world are open and continuing to serve customers as usual. Pliant's operations in Mexico, Germany, and Australia were not included in the Chapter 11 filing and are not subject to the reorganization proceedings. Three of the Company's subsidiaries with Canadian operations will seek recognition of the Chapter 11 proceedings in a Canadian court as "foreign proceedings" pursuant to Canada's Companies' Creditors Arrangement Act. Pliant intends to use the Chapter 11 reorganization process to complete its previously announced financial restructuring, which would reduce debt by up to $578 million and annual interest expense by up to $84 million. The Company intends to file a plan of reorganization to implement the agreed restructuring in the near term. The holders of more than two-thirds of Pliant's 13% Senior Subordinated Notes and the holders of a majority of its preferred and common stock have agreed to support the restructuring transaction and vote in favor of the plan of reorganization. To fund its continuing operations during the reorganization process, Pliant has secured a commitment for debtor-in-possession (DIP) financing from GE Commercial Finance that will provide Pliant with additional liquidity of approximately $70 million. Subject to court approval, these funds will be available to satisfy obligations associated with conducting the Company's business, including payment under normal terms for goods and services provided after today's filing and payment of wages and benefits to active employees and retirees. Harold C. Bevis, Pliant's President and Chief Executive Officer, said: "During the past two years Pliant has taken numerous steps to strengthen operations, expand product offerings and improve the quality of service we provide to our customers. Our strategic plan is designed to position Pliant for a stronger future, with a focus on innovation, customer service, accretive sales growth and operational excellence. We believe that it will enable us to consistently meet and exceed the expectations of our diverse customer base, while continuing to win new business from some of the most important names in Corporate America." He continued, "Today, as the next step in the implementation of our strategic plan, we have taken decisive action to position Pliant to succeed in the long term. Our leadership team and Board of Directors made the decision to file for Chapter 11 because a court-supervised reorganization will allow us to most efficiently resolve our financial challenges and build on our recent accomplishments. Because we enter Chapter 11 with a pre- negotiated debt reduction agreement with several of our stakeholders, we are optimistic that we can complete the process quickly." Bevis noted that Pliant expects its operations to function normally during the Chapter 11 process, with very little change in how it conducts business: * Employees will continue to be paid. Pliant fully expects that there will be no interruptions to salary or benefits for employees. * Pliant will meet customer obligations. The Company anticipates that its manufacturing and research and development facilities will remain open on normal schedules, and that it will continue to fulfill customer orders and provide uninterrupted customer service. * Suppliers will be paid. Pliant intends to continue paying all suppliers for goods and services they provide after the filing. The Company also anticipates that its proposed plan of reorganization will leave suppliers unimpaired for any pre-petition claims they may have incurred. A Difficult Industry Environment In motions filed with the Bankruptcy Court, Pliant reported that its decision to file for Chapter 11 was influenced by several factors, including challenging industry conditions - namely the increase in the price of raw materials. The principal raw materials used by Pliant are polyethylene, PVC and polypropylene (collectively referred to as "resin"), which are petrochemical products whose price and availability are linked closely to the market supply of crude oil and natural gas. The cost of resin constituted nearly two-thirds of Pliant's total manufacturing costs in the first half of 2005. Recent events such as Hurricane Katrina and Hurricane Rita triggered severe increases in the price of resin and tightened availability. Coupled with the tightening of trade terms by certain of Pliant's key suppliers, this increase in the price of resin resulted in a steady deterioration of the Company's liquidity position. Financial Restructuring Transaction Pliant's proposed financial restructuring is intended to improve its liquidity position significantly through the elimination of $41.6 million of annual cash interest payments. On December 28, 2005, Pliant entered into Support Agreements with the holders of more than two-thirds of its 13% Senior Subordinated Notes, the holders of a majority of the outstanding shares of its mandatorily redeemable preferred stock and the holders of a majority of the outstanding shares of its common stock, pursuant to which such holders agreed, subject to the terms and conditions contained in the Support Agreements, to support the Company's proposed financial restructuring. Under the terms of this restructuring, (i) holders of Pliant's $320 million of 13% Senior Subordinated Notes will (a) receive up to $35 million in new debt in consideration for accrued interest that was payable on December 1, 2005, and (b) exchange all of their 13% Senior Subordinated Notes for a combination of 30% of the reorganized Company's common stock and at least $260 million of a newly issued Series AA Redeemable Preferred Stock, which will not be subject to mandatory redemption, and (ii) holders of Pliant's $278 million of mandatorily redeemable preferred stock will exchange all of their mandatorily redeemable preferred stock for a combination of up to $75.5 million of a new Series AA Redeemable Preferred Stock and a percentage of the reorganized Company's common stock to be determined. Completion of the restructuring is subject to a number of conditions, including completion of a plan of reorganization and other definitive documentation, receipt of formal approval of the plan of reorganization from the holders of at least two-thirds in claim amount and 50% in number of the 13% Senior Subordinated Notes that vote on the plan, and bankruptcy court approval. The holders of more than two-thirds of Pliant's 13% Senior Subordinated Notes have agreed to vote in favor of the plan of reorganization. Pliant's principal legal advisors for the Chapter 11 proceedings are Sidley Austin LLP and Young Conaway Stargatt & Taylor LLP. The Company's financial advisor is Jefferies & Company, Inc. More information about Pliant's reorganization is available on the Company's Web site at http://www.pliantcorp.com/ About Pliant Pliant Corporation is a leading producer of value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Company operates 24 manufacturing and research and development facilities around the world, and employs approximately 3,000 people. ----------------------------------------------------------------- [00004] PLIANT CORPORATION'S CHAPTER 11 DATABASE ----------------------------------------------------------------- Lead Debtor: Pliant Corporation 1475 Woodfield Road, Suite 700 Schaumburg, Illinois 60173 Bankruptcy Case No.: 06-10001 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Uniplast Holdings, Inc. 06-10000 Pliant Corporation International 06-10002 Pliant Solutions Corporation 06-10003 Pliant Film Products of Mexico, Inc. 06-10004 Pliant Packaging of Canada, LLC 06-10005 Pliant Investment, Inc. 06-10006 Alliant Company LLC 06-10007 Uniplast U.S., Inc. 06-10008 Uniplast Industries, Co. 06-10009 Pliant Corporation of Canada, Ltd. 06-10010 Chapter 11 Petition Date: January 3, 2006 Court: District of Delaware Judge: Mary F. Walrath Debtors' Counsel: Edmon L. Morton, Esq. Robert S. Brady, Esq. Young, Conaway, Stargatt & Taylor, LLP The Brandywine Building 1000 West Street, 17th Floor P.O. Box 391 Wilmington, Delaware 19899 Tel: (302) 571-6600 Fax: (302) 571-1253 -- and -- Sidley Austin LLP 1 South Dearborn Chicago, Illinois 60603 Debtors' Financial Advisor: Jefferies & Company, Inc. 520 Madison Avenue, 12th Floor New York, New York 10022 Debtors' Claims Agent: Bankruptcy Services, LLC 757 Third Ave. 3rd Floor New York, NY 10017 Tel. (646) 282-2500 Fax. (646) 282-2501 http://www.bsillc.com/ Financial Condition, as of September 30, 2005, reported in initial chapter 11 filings: Total Assets: $604,275,000 Total Debts: $1,197,438,000 ----------------------------------------------------------------- [00005] LIST OF PLIANT CORP.'S 30 LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Entity Nature of Claim Claim Amount ------ --------------- ------------ The Bank of New York Note Debt $220,000,000 Attn: Corporate Trust 13% Senior Administration Subordinated 21st Floor West Notes Due 2010 101 Barclay Street New York, NY 10286 Tel: (800) 254-2826 Fax: (315) 414-3885 The Bank of New York Note Debt $100,000,000 Attn: Corporate Trust 13% Senior Administration Subordinated 21st Floor West Notes Due 2010 101 Barclay Street New York, NY 10286 Tel: (800) 254-2826 Fax: (315) 414-3885 Dow USA Trade Debt $2,495,722 2030 Dow Center Midland, MI 48674 Tel: (800) 258-2436 Fax: (989) 638-1740 Equistar Trade Debt $2,493,377 1221 McKinney Houston, TX 77010 Tel: (713) 652-7300 Fax: (713) 652-4542 Paper Converting Machine Co. Trade Debt $2,281,947 39068 Treasury Center Chicago, IL 60694 Tel: (920) 494-5601 Total Petrochemicals Trade Debt $2,067,031 1201 Louisiana Street, Suite 1800 Houston, TX 77002 Sun Chemical Corporation Trade Debt $1,361,828 35 Waterview Boulevard Parsippany, NJ 07054-1285 Tel: (973) 404-6000 Fax: (973) 404-6439 Sonoco Trade Debt $1,092,100 1 North Second Street Hartsville, SC 29550-3305 Tel: (800) 377-2692 Fax: (843) 339-6682 Blue Cross Blue Shield Insurance $1,100,000 P.O. Box 1186 Chicago, IL 60690-1186 Tel: (800) 541-2768 Fax: (312) 819-1943 Chevron Phillips Chemical Co. Trade Debt $1,022,254 10001 Six Pines Drive The Woodlands, TX 77380 Tel: (800) 231-1212 Fax: (832) 813-6060 DuPont Company Trade Debt $884,963 Center Chestnut Run Plaza 705/GS38 Wilmington, DE 19880-0705 Tel: (800) 628-6208 Fax: (302) 351-7191 Oxyvinyls LP Trade Debt $686,371 5005 LBJ Freeway Dallas, TX 75244-6119 Tel: (877) 699-8465 Fax: (972) 720-7408 BASF Canada Trade Debt $604,066 P.O. Box 7841 Station A Toronto, ON Canada M5W 2R2 Tel: (416) 675-3611 Fax: (289) 360-6005 Ampacet Corporation Trade Debt $598,527 660 White Plains Road Tarrytown, NY 10591-5130 Tel: (888) AMPACET Fax: (914) 631-7197 Phenix Marketing Group Inc. Brokerage $506,968 3305 Healy Drive Winston Salem, NC 27103 Attn: Nyal Cannon Tel: (336) 251-1100 Fax: (603) 798-5434 Huntsman Polymers Trade Debt $479,373 10003 Woodloch Forest Drive The Woodlands, TX 77380 Windmoeller & Hoelscher Corp. Capital Improvement $470,968 23 New England Way Lincoln, RI 02865-4252 BASF USA Trade Debt $443,479 100 Campus Drive Florham Park, NJ 07932 Atofina Chemicals Trade Debt $434,103 2000 Market Street Philadelphia, PA 19103-3222 GE Capital Leases $404,730 1415 West 22nd Street, Suite 600 Oak Brook, IL 60523 Yellow Freight Systems Shipping $333,339 10990 Roe Avenue Overland Park, KS 66211-1213 ARKEMA Inc. Trade Debt $329,154 2000 Market Street Philadelphia, PA 19103-3222 Eastman Chemicals Trade Debt $321,926 P.O. Box 511 Kingsport, TN 37662 Smurfit Stone Container Corp. Trade Debt $319,835 150 North Michigan Avenue Chicago, IL 60601 Westlake Polymers Trade Debt $316,644 2801 Post Oak Boulevard Houston, TX 77056 USF Holland Shipping $298,941 750 East 40th Street Holland, MI 49423 Amoco Polymer Trade Debt $296,419 9040 Cedarview Avenue Jenison, MI 49428 D. Thomas & Associates, Inc. Brokerage $265,470 1717 West 91st Place Kansas City, MO 64114-3279 Standridge Color Trade Debt $250,244 1196 East Hightower Trail Social Circle, GA 30025 C.H. Robinson International Trade Debt $232,306 8100 Mitchell Road Edens Prairie, MN 55344 ----------------------------------------------------------------- [00006] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES ----------------------------------------------------------------- Pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure, if two or more petitions are pending in the same court or against a debtor and an affiliates, "the Court may order a joint administration of the estates." Pliant Corporation is the ultimate parent company of each of the 10 other Debtors. The Debtors are therefore affiliates within the meaning of Section 101(12) of the Bankruptcy Code, Robert S. Brady, at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, states. Many of the motions, applications, hearings and orders that will arise in Pliant's Chapter 11 cases will jointly affect each and every Debtor. To optimally and economically administer the Debtors' pending Chapter 11 cases, those cases should be jointly administered under the case number assigned to Pliant Corporation for procedural purposes only, Mr. Brady asserts. Joint administration will also ease the administrative burden on the Court and all parties-in-interest in the Debtors' Chapter 11 cases and will protect creditors of different estates against potential conflicts of interest, Mr. Brady adds. It will permit the Clerk of the Court to utilize a single docket for all of the cases and to combine notices to creditors and other parties-in- interest in the Debtors' cases. The joint administration of the Debtors' estates will permit counsel for all parties-in-interest to include all of the Debtors' Chapter 11 cases in a single caption for the numerous documents that are likely to be filed and served in these cases. The rights of the Debtors' creditors will not be prejudiced or adversely affected by the joint administration because it is purely procedural and is not intended to affect substantive rights, Mr. Brady assures the Court. Moreover, joint administration will simplify supervision of the administrative aspects of the Debtors' cases by the Office of the United States Trustee. Accordingly, Judge Walrath rules that the Debtors' Chapter 11 cases will be consolidated for procedural purposes only and will be administered jointly under Case No. 06-10001. The Court rules that all pleadings and papers filed in the Debtors' cases will be captioned: UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE _______________________________ ) In re: ) Chapter 11 ) Pliant Corporation., et al., ) Case No. 06-10001 (MFW) ) Debtors. ) Jointly Administered _______________________________) ----------------------------------------------------------------- [00007] PLIANT RECEIVES COURT APPROVAL OF FIRST DAY MOTIONS ----------------------------------------------------------------- SCHAUMBURG, Illinois -- January 4, 2006 -- Pliant Corporation today reported that Judge Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware approved all of the "first-day motions" that Pliant and its subsidiaries in the United States and Canada submitted as part of their filings for reorganization under Chapter 11 of the United States Bankruptcy Code. Approval of these motions will help Pliant continue to operate in the normal course of business during its financial restructuring. The Judge's orders include approval of Pliant's request to continue to pay employee salaries and provide benefits without interruption, to honor its commitments to its customers, and to take other actions necessary to run the company with minimal disruption. Pliant also received interim approval to access debtor-in-possession (DIP) financing provided by GE Commercial Finance and Morgan Stanley Senior Funding, Inc. This financing will provide Pliant with additional liquidity and will be available to satisfy obligations associated with conducting the company's business. Pliant will seek final authorization to utilize the DIP financing at a court hearing scheduled for February 2, 2006. Pliant intends to use the Chapter 11 reorganization process to complete its previously announced financial restructuring, which would reduce debt by up to $578 million and annual interest expense by up to $84 million. The company intends to file a plan of reorganization to implement the agreed restructuring in the near term. The holders of more than two-thirds of Pliant's 13% Senior Subordinated Notes and the holders of a majority of its preferred and common stock have agreed to support the restructuring transaction and vote in favor of the plan of reorganization. Harold C. Bevis, Pliant's President and Chief Executive Officer, said: "We are pleased that Judge Walrath has approved all of our first-day motions, including those related to employee wages and benefits, customer programs, and our new DIP financing. This approval permits the company to maintain normal operations throughout the Chapter 11 process. We expect to continue to provide our customers with value-added products, superior service and leading- edge innovation programs." More information about Pliant's reorganization is available on the Company's Web site at http://www.pliantcorp.com/ About Pliant Pliant Corporation is a leading producer of value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Company operates 24 manufacturing and research and development facilities around the world, and employs approximately 3,000 people. ----------------------------------------------------------------- [00008] MOODY'S WITHDRAWS RATINGS ON PLIANT CORPORATION ----------------------------------------------------------------- Approximately $833 million in rated debt affected NEW YORK, New York -- January 4, 2006 -- Moody's Investors Service withdrew all ratings on Pliant Corporation (Pliant), following the company's announcement that on January 3, 2006 it filed for protection under Chapter 11 of the US Bankruptcy Code. The following ratings were withdrawn: * $262 million 11 5/8% Senior Secured 1st Lien Notes due June 15, 2009 (PIK until 2009), Caa2 * $7 million 11 1/8% Senior Secured Discount 1st Lien Notes due June 15, 2009 (PIK until 2007), Caa2 * $250 million Senior Secured 2nd Lien Notes due September 1, 2009, Ca * $314 million 13% Senior Subordinated Notes due June 1, 2010, C * Corporate Family Rating, Caa2 Headquartered in Schaumburg, Illinois, Pliant Corporation is a manufacturer of value-added films and flexible packaging for food, personal care, medical, agricultural, and industrial applications. For the twelve months ended September 30, 2005, Pliant had revenue of approximately $1.0 billion and EBITDA of approximately $85 million. ----------------------------------------------------------------- [00009] S&P LOWERS PLIANT CORP.'S RATINGS TO 'D' ----------------------------------------------------------------- NEW YORK, New York -- January 4, 2006 -- Standard & Poor's Ratings Services said today that it lowered its ratings on Pliant Corp., including the corporate credit rating to 'D' from 'CC', and removed all ratings from CreditWatch with negative implications, where they were placed Nov. 23, 2005. The rating actions follow the company's filing for reorganization under Chapter 11 of the U.S. Bankruptcy Code on Jan. 3, 2006. Pliant had about $950 million in total debt outstanding at the time of filing for Chapter 11. "The company plans to use the Chapter 11 reorganization process to complete its previously announced financial restructuring, which would significantly reduce its onerous debt burden," said Standard & Poor's credit analyst Liley Mehta. On Dec. 28, 2005, Pliant entered into support agreements with the holders of more than two-thirds of its 13% senior subordinated notes, a majority of its mandatorily redeemable preferred stockholders and a majority of its common stockholders, all of whom agreed to support the company's proposed financial restructuring. Under the terms of this restructuring, holders of Pliant's $320 million of 13% senior subordinated notes will receive up to $35 million in new debt in consideration for accrued interest that was payable on Dec. 1, 2005. In addition, noteholders will exchange all of their 13% notes for a combination of 30% of the reorganized company's common stock and at least $260 million of a newly issued redeemable preferred stock, which will not be subject to mandatory redemption. Pliant's $278 million of mandatorily redeemable preferred stock will be exchanged for a combination of up to $75.5 million of a new redeemable preferred stock and a yet-to-be determined percentage of the reorganized company's common stock. Completion of the restructuring is subject to a number of conditions, including completion of a plan of reorganization and other definitive documentation, receipt of formal approval of the plan of reorganization from at least two- thirds of the 13% senior subordinated noteholders, and bankruptcy court approval. The company intends to file a plan of reorganization to implement the agreed restructuring in the near term. In November 2005, the company completed a new $140 million revolving credit facility maturing in May 2007, and in addition, the company has secured a commitment for about $70 million of DIP financing to fund its operations during the reorganization process. Pliant's weak financial performance had deteriorated further owing to additional raw-material cost increases following Hurricanes Katrina and Rita, and tightening of trade terms by Pliant's key suppliers exacerbated liquidity pressures. With annual revenues of about $1 billion, Schaumburg, Illinois-based Pliant is a domestic producer of extruded film and flexible-packaging products for food, personal care, medical, industrial, and agricultural markets. *** End of Issue No. 1 ***