PEPEPEDA: A US paper company that manufactures toilet paper will file for Chapter 11 bankruptcy protection after a year-long battle with the U.S. Securities and Exchange Commission.
The company filed for bankruptcy protection in March after being accused of misleading investors in a stock offering that led to a massive IPO, the SEC said in a filing on Friday.
“This is an enormous opportunity for the American paper industry to regain the confidence of its customers and shareholders,” said Peter Schoenschmidt, the company’s chairman and chief executive officer.
The SEC said the company had been in voluntary bankruptcy protection since February 2017.
The lawsuit, filed in federal court in Washington, seeks to recover up to $3.5 billion in unpaid taxes, penalties and interest on delinquent debts.
The paper company, based in Portland, Oregon, said in May that it had $1.5 million in assets and $3 million in cash.
The bankruptcy filing does not include any money in the company accounts for the sale of paper and other business.
The Securities and EXCHANGE COMMISSION said in an earlier filing that it was reviewing the PEPTEDA bankruptcy petition.
The PEPREDA bankruptcy will allow PEPELLO to return to normal operations, said David Tompkins, PEPELO’s chief financial officer.
PEPEEDA filed for Chapter 13 bankruptcy protection on July 10, saying that it needed more time to prepare for the anticipated increase in demand for its products after it had received hundreds of thousands of inquiries from investors about its paper.
PepELLO had a $1 billion in assets as of March and $2.4 billion in cash, according to its most recent financial statement.
The IPO of PEPERA’s stock was a massive flop and it closed at $14.30, a 52% decline from its June peak.
PEOEDA has had trouble keeping up with rising demand for toilet paper.
In May, it was forced to lay off more than a quarter of its workforce as it battled a massive outbreak of cholera that affected more than 10 million people.
PEREXON, a U.K.-based company, filed for chapter 11 protection in the U