Smurfit-Stone Container Corp., the US packaging company which was formerly an associate of the Jefferson Smurfit Group, has filed for bankruptcy in the face of falling demand and heavy debt payments.
The petition for Chapter 11 bankruptcy, filed today in a U.S. Bankruptcy Court in Wilmington, Delaware, listed $5.6 billion in consolidated debt and $7.5 billion in consolidated assets as of Sept. 30.
Twenty-four affiliates also sought court protection. The company, which is one of the world's largest paper recyclers, joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers.
"The acceleration of the unprecedented global economic recession has weakened demand for packaging, and the frozen credit markets have prevented an out-of-court refinancing of our capital structure," Patrick Moore, chairman and chief executive officer of Chicago-based Smurfit-Stone, said in a statement.
"While this is not the outcome we anticipated, we are taking this action to become a more financially healthy company."
Smurfit-Stone is North America's second-largest maker of corrugated packaging and has 22,000 employees in the US, Canada, Mexico and Asia, according to its Web site.
Operations outside of the US and Canada are excluded from the bankruptcy process, the company said.
Bloomberg