UPDATE 1: Kloeckner Pentaplast Obtains Final DIP Approval

Wed Dec 03, 2025 12:18 AM ET: Judge Christopher Lopez entered an order Tuesday evening, Dec. 2, approving on a final basis the Kloeckner Pentaplast debtors’ DIP financing, which includes €85 million of new money and a €155 million rollup of first lien debt. The order was entered after the debtors filed a certificate of no objection earlier in the day.

The final DIP hearing scheduled for today, Dec. 3, at 10 a.m. ET, is cancelled, according to a notice subsequently filed by the debtors.

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Original Story 6:50 p.m. UTC on Nov. 5, 2025

Kloeckner Pentaplast Obtains All Requested First Day Relief Including Interim DIP Financing, Avoids Potential Crisis on Factoring Motion 

Judge Christopher Lopez granted all of the Kloeckner Pentaplast debtors’ requests for relief at their first day hearing in their prepackaged chapter 11 case today. Among other relief, the judge approved the debtors’ DIP financing on an interim basis, providing the debtors with access to €264 million of new-money DIP loans.

According to Jack Luze of Kirkland & Ellis, counsel to the debtors, €134 million of the new-money DIP will be used to refinance the debtors’ bridge financing facility while the remaining €130 million will be available for general corporate purposes and chapter 11 needs. Interim DIP approval also rolls up €480 million of first lien debt to the DIP on a cashless basis.

Despite the new liquidity, the debtors immediately faced the prospect of a renewed liquidity crisis when Judge Lopez sided with the U.S. Trustee on an issue concerning the debtors’ motion to continue their factoring arrangements in chapter 11. David Gremling of Kirkland, for the debtors, said the factoring arrangements bring in about €5 million daily.

The judge said he was not comfortable granting the debtors’ factors a priority claim in the event any of their transactions were recharacterized or otherwise avoided. “Here is my concern,” the judge said, “I’m doing it on 10 hours’ notice.”

Sean Scott of Mayer Brown, counsel to COFACE – one of the factors – indicated that failure to obtain the requested relief could be a big issue for his client, potentially one that would cause them to pause their programs.

Chad Husnick of Kirkland, speaking for the debtors, said he was “confused” by the issue since factoring is a “form of financing” and the Bankruptcy Code permits postpetition financing on superpriority basis. Husnick added that if the “factors pull, I have a gigantic liquidity hole overnight.”

The potential crisis appeared to be averted when Judge Lopez proposed that he enter the relief requested on a seven-day interim basis. The judge said that the debtors and factors could return on Wednesday, Nov. 12, to seek further relief. The proposed solution seemed to assuage the parties’ concerns.

The debtors filed for chapter 11 last night, Nov. 4, to implement a prepackaged plan of reorganization that would eliminate approximately €1.3 billion of the debtors’ €2.32 billion in funded debt. The debtors intend to implement the plan and emerge from chapter 11 by Feb. 2, 2026.

Judge Lopez entered an order today that schedules a hearing to consider confirmation of the debtors’ chapter 11 plan on Dec. 16 at 2 p.m. ET.

The prepackaged plan is supported by a Gibson Dunn-represented ad hoc group that holds debt across the company’s first lien and second lien debt stacks. The ad hoc group’s membership is available HERE.

The ad hoc group funded the company with €112 million in bridge funding in August and is providing the debtors with the DIP facility, which when approved on a final basis will be a €984 million facility. As mentioned, with today’s interim approval, the facility refinances the €112 million bridge loan, rolls up €480 million of first lien debt, and provides €130 million of new-money.

A final DIP hearing is scheduled for Dec. 3 at 10 a.m. ET, during which Judge Lopez will consider approval of the remainder of the DIP facility: €85 million of new money and a €155 million rollup of first lien debt.

Husnick, for the debtors, said that it had been “a huge push to get to where we are today” but that he believed it would be “a very smooth process overall.” Husnick added that he expects a “fully consensual prepackaged chapter 11 case.” He confirmed that the debtors began soliciting their plan of reorganization yesterday, Nov. 4.

Scott Greenberg of Gibson Dunn, counsel to the ad hoc group, said it has been a “long road” but that the parties are “at a really good place.” Greenberg elaborated that the group first formed in April 2024 and consists of 82% of first lien creditors. The group holdings include a combination of first lien term loan debt (both USD and euro denominated), first lien bonds and about 46% to 47% of the RCF, according to Greenberg.

Greenberg said that the group’s discussion with the company regarding a potential amend and extend for the first lien debt “got to a point when all documentation was done,” but the company and sponsor Strategic Value Partners, or SVP, decided not to go forward for “business reasons.”

Greenberg noted that the contemplated amend-and-extend transaction would have also involved bringing in €275 million of fresh capital to support the business and pay some of the lenders.

After the amend-and-extend deal fell apart in late July, Greenberg said the company reached out to his clients in August saying it needed additional liquidity to avoid a “catastrophic” freefall chapter 11.

Greenberg said his group agreed to a chapter 11 prearranged transaction, but that morphed into the current prepackaged transaction “just last weekend” when second lien lenders and sponsor SPV reached a global deal with the debtors and the ad hoc group.

Generally, under the plan, the proposed €984 million DIP would roll into an exit facility. First lien creditors would receive 100% of reorganized equity, subject to dilution by a management incentive plan. Second lien creditors would see their claims roll into a €17.5 million portion of exit financing pari passu with the exit facility. Existing equity interests would be canceled. All other claims will be unimpaired, Luze explained.

SVP is the beneficial holder of a significant majority of the company’s outstanding equity interests, and Husnick said today that SVP holds about €58 million of first lien debt (SVP funded the company with a €50 million additional term loan in February). In addition, SVP, along with CastleKnight, is one of the largest holders of the second lien notes.