PET Recycling Firm Filed for Chapter 11 Bankruptcy

The filing covers all of the operations of CarbonLite, in addition to its subsidiary PinnPACK Packaging.

SEATTLE (Scrap Monster): Los Angeles-based PET recycling firm CarbonLite and its subsidiary filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware. The filing covers all of the operations of CarbonLite, in addition to its subsidiary PinnPACK Packaging.

The company attributed the decision to ongoing market impacts due to Covid-19 pandemic. The illness of employees had led to cut in production. The delay in opening of its proposed new facility in Pennsylvania added to the woes. In addition, the falling price of virgin plastics relative to rPET also dented the demand for rPET, it noted. Furthermore, the pandemic crisis also led to significant rise in input costs.

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According to bankruptcy documents, the company intends to reorganize its business and continue operating. It owes substantial amount of money to its customers. It owes over $27 million to Nestle Waters North America and over $20 million to Niagara Bottling, as per the bankruptcy petition.

Leon Farahnik, CEO of CarbonLite noted that the step has become necessary during these times of unprecedented challenges. The reorganization will make the company strongly positioned for the future, he added.

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