A subsidiary of sustainable packaging giant Ardagh Group has turned to a U.S. bankruptcy court, filing for Chapter 15 recognition in New York to anchor restructuring proceedings already underway in Luxembourg.

Luxembourg Ruling Triggers U.S. Filing

In a declaration filed Sunday, Torsten Schoen, the foreign representative for ARD Finance SA, said a Luxembourg court ruled after a Dec. 3 hearing that creditors could lawfully push the company into reorganization. The Chapter 15 filing asks a U.S. court to recognize and give effect to those foreign proceedings.

ARD Finance is a financing and holding arm within Ardagh Group, serving as a critical link in the company’s global capital structure.

Lawsuit by Noteholders Set the Stage

The Chapter 15 move follows litigation launched in the United States by minority holders of ARD’s payment-in-kind (PIK) notes, including Carronade Capital Master LP, Crown Managed Accounts SPC, and Deutsche Bank Securities Inc.

On Nov. 13, those creditors sued in New York state court seeking repayment of roughly €250 million, alleging an event of default under the notes’ governing indenture.

Heavy Debt Load from Toggle PIK Notes

According to the declaration, ARD Finance issued about €1 billion and $895 million in senior secured toggle PIK notes in 2019 under New York law, all maturing in 2027. The company told the court it is currently unable to repay the notes.

In January 2022, ARD Finance partially redeemed the debt, paying down €204.1 million and $234.7 million. Even after that step, it still carries approximately €860 million and $986 million in outstanding obligations.

ARD Finance formally entered judicial reorganization in Luxembourg on Nov. 12, setting the cross-border process in motion.

Part of a Broader Ardagh Overhaul

Separately, Ardagh Group has disclosed a sweeping recapitalization plan, slashing about $4.3 billion in debt through a debt-for-equity swap and injecting roughly $1.5 billion in fresh capital.

The company is a major global producer of sustainable metal and glass packaging, operating 58 plants across 16 countries, employing about 19,000 people, and generating approximately $9.1 billion in annual sales.

What Comes Next

A representative for the debtor did not immediately respond to requests for comment Monday. ARD Finance SA is represented by Andrew K. Glenn of Glenn Agre Bergmann & Fuentes LLP.

With Ardagh Group filed for Chapter 15, the case now shifts to a transatlantic stage—where U.S. courts may soon help determine whether the company’s Luxembourg-led restructuring holds together under the weight of global debt and determined creditors.