Leiner Emerges from Chapter 11

Leiner Emerges from Chapter 11

CARSON, Calif.--Leiner Health Products exited Chapter 11, 49 days after filing its petition in late February. This line of action was part of Leiner's plans to "re-engineer" the company, an effort that began in July 2000. The company had continued to see net losses, including its most recent loss of $11.1 million for its third quarter of fiscal 2002, reported Feb. 15.

As outlined in its reorganization plan, holders of certain senior subordinated notes received $15 million in cash and $7 million in newly created preferred stock in exchange for their notes, which reduced Leiner's debt by $85 million. Leiner's existing senior indebtedness has been restructured and remains outstanding.

Additionally, Leiner's bank lenders extended the company a revolving credit facility of $20 million. The lenders also received $7.5 million in newly created preferred stock, and investors led by North Castle Partners invested $20 million in newly created preferred stock.

"Combined with our operational engineering, Leiner has a reduced debt load, a significantly improved capital structure, far more efficient operations and is very well-positioned for strong future growth," said Robert Kaminski, chief executive office of Leiner (www.leiner.com). He added that the company's employees' dedication and hard work was vital to Leiner's successful extrication.