It’s common knowledge in Rockland County that the Internet has had a devastating effect on a number of industries. Less commonly known is the effect of the Internet on products that most people take for granted — stationery and envelopes. As more companies send invoices and other correspondence via email, the need for envelopes has significantly declined. Thus, one of the nation’s largest manufacturers of envelopes and mailing supplies, Cenveo, Inc., has filed for Chapter 11 bankruptcy.
Cenveo makes a number of products that are no longer used by commercial firms. One such product is a specialized mailing envelope for credit cart statements. In addition to printing about 50 million envelopes per year, Cenveo also prints comic books and prescription labels for pharmacies. The company currently has about $1 billion in debt and is facing a dark financial future.
The plan announced by the company will just about wipe out unsecured creditors and owners of the company’s equity. The company has reached an agreement with its creditors to reduce their claims by about $700 million.
Secured lenders will wind up nearly 100 percent of the equity in the reorganized company. The company will cancel all of its common stock, and holders of the company’s unsecured debt will receive about 2.5 percent of their claims. The company has received a commitment for $290 million of debtor-in-possession financing to help it operate during the pendency of the bankruptcy proceeding. The company’s plan must be approved by the creditors’ committee and the bankruptcy court in White Plains before it can become effective.
Source: Reuters, “Envelope maker, comic book printer Cenveo files for bankruptcy,” Tracy Rucinski, Feb. 2, 2018