Equipment maker, Xerium Technologies, filed chapter 11 petitions for bankruptcy on March 30th in the United States Bankruptcy Court for the District of Delaware.  According to the Declaration filed by Xerium’s CEO (the “Declaration”),  the company filed for bankruptcy in order to trim its debt down from $640 million to $480 million.  To achieve this, Xerium filed a prepackaged plan of reorganization with the Bankruptcy Court at the same time that it filed for bankruptcy.  A copy of Xerium’s proposed plan is available here.

Xerium began soliciting votes for its plan of reorganization almost one month prior to its filing for bankruptcy.  Under the proposed plan,  the company’s lenders and certain creditors will receive approximately 83% of Xerium’s stock in exchange for new debt totaling $410 million.  Existing shareholders of Xerium will receive pro rata shares of the remaining 17% of the reorganized company’s newly issued stock.

Xerium manufacturers equipment used in the paper industry.  According to its Declaration, Xerium is “a leading global manufacturer and supplier” of consumable products used in the production of paper products.  The company’s customers include International Paper, MeadWestvaco Corp. and Smurfit-Stone Corporation (read more about the Smurfit-Stone bankruptcy here).  According to Xerium’s Bankruptcy Petition, the company’s assets total $693 million against debts of $813 million.

This bankruptcy proceeding is before the Honorable Kevin J. Carey, Chief Judge of the United States Bankruptcy Court for the District of Delaware.