Envelope Maker Cenveo Files Ch. 11, Hopes to Shed $700M
Envelope and printer maker Cenveo Inc. filed for Chapter 11 protection in a New York bankruptcy court Friday, saying it hopes to shed $700 million in debt.
The Stamford, Connecticut-based company said in a Friday statement it has already secured majority approval from its first-lien debt holders for its restructuring plan, as well as $290 million in debtor-in-place financing from its existing lenders.
“This financial restructuring will significantly reduce the amount of debt on the balance sheet, increase cash flow available to invest in the business, and create a stronger and more competitive company in the future,” CEO Robert Burton Sr. said in the statement.
The 99-year-old company — one of the largest U.S. printing and envelope companies — also produces custom labels and does commercial printing, including magazines and comic books. It employs approximately 7,300 people, and according to the company’s website, it currently operates more than 100 facilities in the U.S., Asia, South America and Central America. The company’s overseas subsidiaries are not entering bankruptcy, the statement said.
In 2006, the company purchased printing-services company Cadmus Communications Corp. for $430 million, and in 2013 it acquired most of the operating assets of bankrupt National Envelope for $33 million.
The bankruptcy petition puts the company’s liabilities at more than $1 billion. The petition specifically lists more than $200 million in unsecured debt, including $105 million in unsecured notes held by the Bank of New York and nearly $50 million in pension obligations.
In the statement, the company said it has entered into a restructuring support agreement with the holders of more than half of its first-lien debt and that its existing lenders had agreed to extend up to $190 million in asset-based loans and $100 million in term loan financing. The company said the liquidity will allow the company to continue its operations and payments to vendors through the bankruptcy.
“We are pleased that our plan has the backing of a number of our key financial stakeholders, and we are confident that Cenveo will emerge from this process with a stronger balance sheet to support its profitable growth in the years ahead,” Burton said.
Cenveo is represented by Jonathan S. Henes, Joshua A. Sussberg, George Klidonas, Natasha Hwangpo, James H.M. Sprayregen, Melissa N. Koss and Gregory F. Pesce of Kirkland & Ellis LLP.
The case is In re: Cenveo CEM Inc., case number 18-22189 in the United States Bankruptcy Court for the Southern District of New York.
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