A New Jersey bankruptcy judge has confirmed the Chapter 11 liquidation plan of Plastic Suppliers Inc., the Ohio-based compostable film producer that crumbled under pandemic pressures, market shifts, and global sanctions. The ruling finalizes a months-long battle that will return payouts to creditors from a liquidation trust funded by the sale of nearly all the company’s assets.
In an order filed Thursday, U.S. Bankruptcy Judge Andrew B. Altenburg Jr. approved the debtor’s disclosure statement and liquidation plan, which had been adjusted to resolve concerns from the U.S. Trustee’s Office.
“It was a very successful Chapter 11 liquidation proceeding, which will return a sizable dividend to creditors,” said debtor’s attorney Stephen M. Packman of Archer & Greiner PC.
From Pandemic Fallout to Courtroom Survival
Plastic Suppliers, alongside subsidiaries Sidaplax Inc. and Specialty Films Inc., filed for Chapter 11 protection on Dec. 22, citing liabilities between $10 million and $50 million. CEO Michael DuFrayne testified that sales had collapsed during COVID-19 while the shift toward bio-based films and sanctions in 2022 further strained operations.
The company sought a going-concern sale to keep its sustainability mission alive. With API Industries Inc. (Aluf Plastics) as the stalking-horse bidder, an auction was held on Jan. 27. API ultimately won with a $16.4 million offer, a figure that closed in February and netted nearly $5.2 million in cash proceeds for the debtor’s estate.
