Russell-Stanley Holdings, Inc.

August 19, 2005 16:25 ET

Mauser-Werke GmbH & Co. KG to Acquire Assets of Russell-Stanley Holdings, Inc. and Certain of its Subsidiaries

BRIDGEWATER, N.J.--(CCNMatthews - Aug 19, 2005) -

Russell-Stanley Files Prepackaged Chapter 11 Reorganization Cases With Unanimous Creditor Support; Normal Company Operations Continue

Russell-Stanley Holdings, Inc. ("Russell-Stanley" or "the Company") today announced that it has entered into a definitive asset purchase agreement with an affiliate of Mauser-Werke GmbH & Co. KG ("Mauser") and One Equity Partners, pursuant to which Russell-Stanley and certain of its subsidiaries would sell substantially all of their assets to Mauser. To effectuate the asset sale under the Purchase Agreement, Russell-Stanley and certain of its subsidiaries filed prepackaged reorganization cases under Chapter 11 of the Bankruptcy Code and a prepackaged Plan of Reorganization (the "Plan"). Both filings were made in the U.S. Bankruptcy Court for the District of Delaware. Prior to the filings, Russell-Stanley obtained 100% acceptance of the Plan from voting creditors. This unanimous support is expected to minimize the duration of the Chapter 11 cases.

The Chapter 11 filing is a condition of the asset sale and was not due to operational concerns. The Company believes that its underlying business is sound and that the business will be strengthened by a combination with the financially strong Mauser organization. Russell-Stanley's senior management is expected to continue in their current capacity both during the Chapter 11 cases and with Mauser after the sale is completed.

"This combination with Mauser will provide the Russell-Stanley business with the additional resources necessary to continue to meet and exceed the expectations of our customers by partnering with a truly global leader in industrial packaging," stated Ronald M. Litchkowski, President and Chief Executive Officer of Russell-Stanley. "During our Chapter 11 reorganization, we will continue to operate as usual and will fulfill all of our customer obligations during this process. Our commitment to our customers and vendors remains steadfast."

Under the proposed plan, Russell-Stanley's existing subordinated debt and equity will be cancelled, and bondholders will receive their pro rata share of the sale proceeds that remain after secured claims, unsecured claims other than bond claims, and Chapter 11 expenses have been paid or reserved.

Russell-Stanley's relationships with its vendors should not be adversely affected by this transaction or the Chapter 11 cases. The Company will pay vendors for post-petition goods and services provided on or after the filing date in the normal course of business, which obligations are entitled to priority in payment in the Chapter 11 cases. All outstanding purchase orders for delivery of goods and services should be processed and shipped as usual. The proposed plan of reorganization contemplates the payment in full of any allowed pre-petition vendor claims that remain unpaid upon consummation of the Plan. Moreover, as part of the transaction, Mauser has agreed, upon the closing, to assume and pay valid and accrued trade payables that are not otherwise paid when due as a result of the filing and that are reflected on the Company's books.

Russell-Stanley expects to emerge from Chapter 11 and close the transaction with Mauser within the next few months subject to customary closing conditions contained in the asset purchase agreement, including receipt of all necessary bankruptcy court and other approvals.

About Russell-Stanley

Russell-Stanley Holdings, Inc. is North America's largest plastic drum manufacturer, second largest steel drum manufacturer, and a leading industrial container supply chain management company. More information on the company can be found at www.russell-stanley.com.

About Mauser-Werke GmbH Co. KG

Mauser-Werke GmbH Co. KG is a global leader in industrial packaging, with its headquarters in Bruehl, Germany. More information on Mauser can be found at www.mauser-werke.com.

Contact Information

  • Brunswick Group
    Ellen Gonda/Diana Drobiner, 212-333-3810