bankruptcy : Recycling Company CarbonLite filed for bankruptcy
Los Angeles-based CarbonLite filed for bankruptcy. The filing covers all three of the company’s facilities, in California, Texas and Pennsylvania. It also covers PinnPACK Packaging, a subsidiary that produces thermoforms. Overall, 11 CarbonLite-affiliated entities filed for bankruptcy.
Production at all these facilities will continue as usual without interruption, as will payment of all employees. Layoffs are not under consideration. There will be no stoppage of supply to CarbonLite’s customers during the reorganization period. In the news release, CarbonLite indicated it plans to renegotiate contracts with its customers as part of the bankruptcy.
"Pressures directly related to the coronavirus pandemic”
CarbonLite operates recycling facilities that bring in PET bales from deposit and curbside sources. The company processes the PET and sells RPET pellets to major bottling firms, including Nestlé Waters North America and Niagara Bottling, both of which are listed in the bankruptcy petition as creditors with claims in the many millions of dollars.
CarbonLite has grown significantly in recent years, opening the Pennsylvania facility in early 2020 and planning a fourth plant in Florida. In a news release, CarbonLite attributed the bankruptcy to “pressures directly related to the coronavirus pandemic.”
“This included temporary production slow-downs caused by employee illness, the low price of virgin plastic relative to rPET, and a nine-month delay in the grand opening of the company’s new Pennsylvania facility caused by travel restrictions that held up equipment commissioning by European manufacturers,” the company stated.
“We’ve chosen to take this necessary step during a time of unprecedented challenge and expect to emerge from reorganization even more strongly positioned for the future,” said Leon Farahnik, CEO of CarbonLite, in the release. “Our customers, all of whom have steadily increased their commitments to the use of recycled plastic in their products, have expressed confidence in this process and our carefully considered decision.”
In bankruptcy documents, CarbonLite Recycling estimated it has assets of between $50 million and $100 million, and liabilities of between $50 million and $100 million. The company anticipates that sufficient funds will be available to pay its unsecured creditors after the reorganization, according to the bankruptcy petition. The list of creditors includes numerous companies involved in the plastics recycling sector.