, headquartered in Seymour, Ind., which manufactures compostable bioplastics, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Indiana. The company says it has taken this action to strengthen its balance sheet, cleanup its capitalization structure and gain financial flexibility as it looks to realign its operations. Cereplast says it plans to continue to operate during the reorganization process.
"We intend to use the reorganization process to help implement our plan to lower costs, stabilize our businesses, grow revenue and diversify our product lines," says CEO Frederic Scheer.
Scheer continues, "We have taken a number of steps to improve our operations over the past few months, and we were making great progress; however, the lack of traction of bioplastics demand in the United States, the repetitive delays in implementation of the bioplastic regulation in Europe and especially in Italy combined with the legal problems created by several of our lenders made clear to our board that reorganization was the proper path forward. We believe that this reorganization will enable us to reduce our debt and implement operational changes while maintaining our commitment to the environment."
He adds, "We appreciate the ongoing dedication of our employees, whose hard work is critical to our success and the future of our company. Regrettably, as a result of this reorganization, jobs will be impacted during the transition period."
In conjunction with its reorganization, Cereplast says it is negotiating debtor-in-possession (DIP) financing from several interested parties.