Seymour, IN-based Cereplast, a manufacturer of proprietary biobased, compostable bioplastics, has announced that the company has filed voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Indiana. According to its press release, the company has "taken this action to strengthen its balance sheet, clean up its capitalization structure and gain financial flexibility as it continues to realign its operations."
The company said that it intends to continue to operate during the reorganization process.
As part of the reorganization, Cereplast is taking steps to align its cost structure with the realities of market demand. The company expects to redirect its operations in two directions: (1) toward traditional compounded products and recycling polyolefin and (2) bioplastic made of diversified feedstock including algae and polylactic acid.
"We intend to use the reorganization process to help implement our plan to lower costs, stabilize our businesses, grow revenue and diversify our product lines," said Frederic Scheer, CEO of Cereplast. "We have taken a number of steps to improve our operations over the past few months and we were making great progress; however, the lack of traction of bioplastics demand in the United States, the repetitive delays in implementation of the bioplastic regulation in Europe and especially in Italy combined with the legal problems created by several of our lenders made clear to our Board that reorganization was the proper path forward. We believe that this reorganization will enable us to reduce our debt and implement operational changes, while maintaining our commitment to the environment."
He continued, "We appreciate the ongoing dedication of our employees, whose hard work is critical to our success and the future of our company. Regrettably, as a result of this reorganization, jobs will be impacted during the transition period."