Anchor Glass files again for bankruptcy

Action is company's 3rd such filing since 1996

August 09, 2005|By BLOOMBERG NEWS

TAMPA, Fla. - Anchor Glass Container Corp., the third-largest U.S. maker of glass containers, filed for bankruptcy protection again yesterday, three days after saying it was restating results from 2001 to 2003 because of improper accounting.

The company, which makes beer bottles for Anheuser-Busch Cos., listed assets of $661.5 million and liabilities of $666.5 million in its U.S. Bankruptcy Court filing in Tampa, Fla., where Anchor is based. It is Anchor's third bankruptcy filing since 1996.

Anchor attributed the filing to increased expenses and a drop in demand for glass. It will use bankruptcy to reject unprofitable contracts, curtail production and restructure its debt, Robert Soriano, Anchor's lawyer, said in court papers.

The company's debt includes $368 million in notes due in 2013, $63.5 million owed to Wachovia Capital Finance Corp., and $50 million in trade debt, according to court documents. Bank of New York Co. is the trustee for the 11 percent notes.

Wachovia has agreed to continue providing a $115 million loan to Anchor. Wachovia has been providing the financing since August 2002. Several noteholders will provide an additional $15 million loan

Accounting errors probably caused overstated net losses of $2 million in 2001 and $1.4 million in 2002, Anchor said last week. The company audit committee is reviewing the figures.

Anchor said that its net loss for the second quarter of 2003 probably was understated by $4.2 million, and that separate transactions understated net losses by $500,000 in 2003 and $1.3 million in 2004.

Anchor is seeking court permission to continue paying its roughly 2,800 employees. The company pays about $13 million a month in salaries, Soriano said in court papers.

Ninety percent of the workers are members of the Glass, Molders, Pottery, Plastics & Allied Workers International Union. The rest are members of the United Steelworkers of America, according to court documents.

Upon its exit from the second bankruptcy, Cerberus and affiliated entities acquired all of Anchor's outstanding common stock.

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