Multi-Color: Prepackaged Plan Targets $3.9B Debt Reduction

Multi-Color Corporation and certain affiliates filed for chapter 11 protection on January 29, 2026, in the U.S. Bankruptcy Court for the District of New Jersey, as described in a company release. The debtors entered the case with a prepackaged plan supported by the sponsor and a majority of first-lien lenders, and they are seeking approval of a $657.5 million DIP facility to fund operations. The plan targets a recapitalization that would reduce net debt by about $3.9 billion, provide more than $550 million of liquidity at emergence, and reset maturities with a seven-year runway on new debt. General unsecured trade, customer, employee, vendor, and supplier claims are slated to be unimpaired, while junior funded debt and existing equity are scheduled for meaningful dilution or cancellation.

Multi-Color is a global prime label manufacturer that has expanded through decades of acquisitions and operates a multi-format platform spanning pressure-sensitive, cut-and-stack, in-mold, roll-fed, shrink sleeve, and RFID-enabled labels. CD&R described the MCC/Fort Dearborn combination as a scaled global label manufacturer, and trade coverage of a 2025 plant closure reported sales of more than $3 billion and production sites in 29 countries. The case arrives amid a packaging labels market estimated at about $53.9 billion in 2024 with projections to reach roughly $70.0 billion by 2030, and a labelling services market projected to reach about $8.1 billion by 2030, a backdrop that underscores the scale of MCC’s customer base and the sensitivity of label volumes to consumer and industrial demand.

Debtor(s)	Multi-Color Corporation and affiliated debtors
Court	U.S. Bankruptcy Court, District of New Jersey
Case Number	26-10910
Petition Date	January 29, 2026
Plan Type	Prepackaged plan of reorganization
Plan Sponsor	Clayton, Dubilier & Rice (CD&R)
DIP Facility	Up to $657.5 million (includes $250 million new money and a 1:1 roll-up)
Claims Agent	Kurtzman Carson Consultants, LLC dba Verita Global
Employees	Approximately 12,800 worldwide (about 4,870 in the U.S.)
Reported Revenue	About $3.1 billion (2025)
Funded Debt (Prepetition)	About $5.9 billion total

Prepackaged Restructuring Overview

Multi-Color’s chapter 11 case is structured as a prepackaged plan supported by CD&R and a supermajority of first-lien lenders. The restructuring support agreement (RSA) is between the debtors, CD&R as sponsor and plan sponsor, and consenting first-lien lenders holding about 72.3% of the cash flow revolving facility, term loan, and secured note obligations. Solicitation began on January 27, 2026, two days before the petition date, and the debtors are seeking a combined disclosure statement approval and confirmation hearing to shorten the case timeline. Trade coverage described the filing as a prepackaged chapter 11 process.

The recapitalization is designed to convert a large portion of the first-lien and junior funded debt into a mix of new equity, new debt, and cash. The RSA contemplates a $489 million new preferred equity investment, a $400 million sponsor equity investment, and about $1.9 billion of new debt issued at emergence. The plan also provides for new preferred equity subscription rights, cash consideration, and new warrants for first-lien lenders, plus a mix of cash and new common equity for junior funded debt. Management expects the restructuring to cut net debt by roughly $3.9 billion, deliver more than $550 million of exit liquidity, and reduce annual debt service by about $350 million while leaving general unsecured creditors unimpaired.

Business Overview and Operating Footprint

Multi-Color traces its origins to 1916 and has grown into a global provider of prime label solutions for consumer, industrial, and specialty products. Court filings describe a business that provides pressure-sensitive labels (its largest segment), cut-and-stack labels, in-mold labels, roll-fed labels, shrink sleeves, and RFID-enabled labeling, alongside equipment solutions that support label application and automation. The company’s footprint spans more than 25 countries with over 90 facilities, and filings estimate approximately 12,800 employees worldwide. The business reported about $3.1 billion of revenue in 2025, down roughly 14% from 2022 through year-end 2025.

Product mix and customer sectors. The company’s largest revenue segment is pressure-sensitive labels, followed by cut-and-stack and in-mold labels, with smaller contributions from roll-fed, shrink sleeve, and RFID-enhanced products. The debtors also emphasized label solutions tied to sustainability, functionality, and premiumization, and the ability to integrate branding with packaging at scale.

The revenue mix reported in court filings reflects a diversified label platform rather than reliance on a single format:

Beyond label manufacturing, MCC operates an equipment solutions business that engineers and builds application systems used by customers to deploy labels at scale. The equipment segment supports customer retention and creates switching costs by integrating MCC’s label formats into production lines, but it also increases the company’s exposure to capital spending cycles and customer capex delays.

Acquisition-driven expansion. The company’s operating footprint reflects a multi-year acquisition strategy. Court filings cite more than 50 acquisitions over the past 15 years, including the Constantia Flexibles labels division (2017), the W/S Packaging merger (2019), and multiple regional label platform deals across 2022–2024. A key inflection point came in 2021 when CD&R announced plans to combine Fort Dearborn and MCC. The merger closed later that year, creating the platform that now sits at the center of the prepackaged restructuring.

Geographic footprint. The debtors operate a distributed manufacturing network designed to serve multinational consumer products and regulated industries. Court filings break out facilities by region: 39 sites in North America, 26 in Europe, 7 in Asia Pacific, 3 in South America, 5 in Africa, and 11 in Australia and New Zealand. The geographic dispersion allows MCC to serve local brand owners with shorter lead times and to manufacture labels near customer production hubs, but it also increases logistics and procurement complexity.

Scale and operational complexity. Court filings emphasize a global manufacturing footprint with regional specialization and a mix of large consumer brands, pharmaceutical products, and industrial customers. That diversity provides some insulation from single-market shocks, but it also requires significant working capital and capital expenditures to maintain tooling, raw materials, and compliance with customer specifications. The debtors note that MCC’s customer onboarding cycles can span 12–24 months, which makes regaining volume and market share a multi-quarter process rather than an immediate fix.

Filings also show a workforce heavily concentrated in production roles. Of the approximately 12,800 employees worldwide, about 4,870 are based in the United States, with the remainder spread across Europe, Asia Pacific, and other regions. The operating model relies on local plant management, regional procurement, and a global customer service structure that supports multi-site customers. That operating complexity helps explain the emphasis on stabilizing vendor relationships and maintaining uninterrupted plant operations during the restructuring.

Capital Structure and Funded Debt

Multi-Color entered chapter 11 with roughly $5.9 billion of funded debt, split between secured credit facilities, secured notes, and unsecured notes. The capital stack includes an asset-based lending (ABL) facility, a cash flow revolving facility, U.S. and European term loans, secured notes issued in 2021, 2023, and 2024, and unsecured notes due in 2027 and 2029. At the petition date, the debtors reported $445 million outstanding on the ABL facility, $200 million on the cash flow revolver, $1.6 billion of U.S. term loans, $569 million of European term loans, $1.75 billion of secured notes, and about $226 million of finance leases and other secured obligations.

Recent capital markets activity. MCC continued to access debt markets even as operating performance softened, including secured note issuances in 2023 and 2024 and a recapitalization announcement in January 2026 that framed the restructuring as a balance-sheet reset. The recapitalization announcement emphasized a plan to reduce debt materially while preserving customer and supplier relationships during the prepackaged process.

Prepetition funded debt summary (approximate principal outstanding).

Facility structure and pricing. The ABL facility is a multi-currency structure with a $400 million U.S. sub-facility, a $15 million French sub-facility, and a $175 million global sub-facility. Pricing on the ABL facility ranges from SOFR/EURIBOR plus 1.25%–1.75% depending on excess availability, while the cash flow revolver prices at SOFR/EURIBOR plus 3.50%–4.00% based on leverage. The U.S. and European term loans mature in October 2028 and carry SOFR/EURIBOR plus 5.00% margins, a pricing profile that underscores the importance of deleveraging for post-emergence cash flow.

Selected maturity profile. The maturity stack condensed in 2027–2029 before the company issued new 2031 secured notes in 2024. The unsecured notes come due in 2027 and 2029, while the secured notes and term loans mature in 2028 and 2031, creating a cliff that required a comprehensive refinancing rather than incremental amendments.

The debt stack demonstrates how MCC layered secured notes on top of its term loans and revolvers, resulting in a heavy first-lien structure. This structure placed additional pressure on cash flows when revenue softened and made sponsor-backed deleveraging a central objective of the RSA.

Liquidity Pressures and Filing Drivers

Court filings attribute MCC’s distress to a combination of industry volatility, raw material and labor constraints, and subsequent customer destocking that reduced label volumes after the 2021–2022 demand surge. As supply constraints eased, customer inventories normalized, leading to lower order volumes and a 14% revenue decline from 2022 through year-end 2025. Management also cited longer onboarding cycles and project qualification timelines in the prime labels industry, which slowed market share recovery and lengthened the path to margin improvement.

The filings emphasize that MCC’s liquidity strain was not just a short-term cash crunch but a structural mismatch between cash generation and funded debt service. The company highlighted the need for a comprehensive operational and commercial restructuring to stabilize margins, improve capacity utilization, and rebuild lost volume. Management also noted that negative market noise around refinancing efforts created customer and supplier anxiety, which heightened the need for a court-supervised process that could provide liquidity assurances and preserve vendor relationships.

The liquidity issue was amplified by MCC’s near-term debt maturities and fixed charge burden. The company faced a pending default under its 2027 unsecured notes after electing not to pay a $36.2 million interest coupon due January 15, 2026. Failure to cure within the 30-day grace period would have triggered a cross-default under the ABL and cash flow credit agreements, allowing lenders to accelerate obligations and sweep collateral proceeds. Filings describe an anticipated liquidity shortfall at the end of January 2026, which compressed the timeline for a negotiated solution and pushed the company into a prepackaged filing.

DIP Financing and Cash Collateral

The debtors seek a DIP facility of up to $657.5 million to fund operations and the restructuring process. The structure combines $250 million of new money with a 1:1 roll-up of first-lien debt, a $7.5 million backstop premium, and up to $150 million of incremental new money for emergence costs. The DIP lenders are the plan sponsor and consenting first-lien lenders, and the facility is designed to provide $150 million of interim liquidity immediately after the filing. The debtors reported approximately $67 million of cash on hand in the initial DIP budget, but they argue that the DIP facility is needed to maintain operations, support suppliers, and fund case administration across a global manufacturing network.

DIP facility components. The proposed financing is structured as a blend of new money, roll-up financing, and incremental liquidity tied to emergence. The components and uses are summarized below:

The roll-up feature means a portion of the prepetition first-lien debt is converted into postpetition DIP obligations, aligning the DIP lenders’ recovery with the plan’s first-lien treatment and increasing the amount of priority claims that must be satisfied at emergence. That structure is typical in sponsor-backed prepacks where the same lenders support the DIP and the plan.

The financing proposal also sets the operating guardrails for the chapter 11 period. The DIP proceeds are earmarked for working capital, ordinary course operations, restructuring costs, and professional fees, all within an approved budget. The debtors seek authority to use cash collateral on a budgeted basis with adequate protection for prepetition secured lenders, including replacement liens and superpriority claims. In practice, the DIP facility functions as both a liquidity bridge and a governance framework that ties spending to the milestones in the prepackaged plan.

The financing request seeks superpriority administrative expense claims and priming liens, subject to a carve-out and the terms of the interim order. The motion also requests authority to use cash collateral on a budgeted basis, with adequate protection for prepetition secured lenders. The debtor narrative ties the DIP structure to the broader prepackaged plan: the same sponsor and first-lien lender group backstops both the DIP and the equity financing contemplated at emergence.

Plan Structure and Recoveries

The plan divides claims and interests into ten classes with a mix of reinstatement, cash consideration, and equity allocations. Classes 1–3 (other secured claims, other priority claims, and ABL claims) are unimpaired and receive cash payment, reinstatement, or refinancing under the new ABL facility. Class 4 first-lien secured claims and Class 5 junior funded debt claims are impaired and receive combinations of new debt, cash, preferred equity, common equity, and warrants. Class 6 general unsecured claims are unimpaired and reinstated, and intercompany claims and interests are resolved through reinstatement or cancellation at the debtors’ election. Section 510(b) claims and existing equity interests are cancelled with no recovery.

Allowed claim amounts behind the recoveries. The disclosure statement’s recovery table is tied to projected allowed claim amounts. The table lists about $226.0 million of other secured claims, $100.5 million of other priority claims, $444.8 million of ABL claims, $1.95 billion of first-lien secured claims, $3.20 billion of junior funded debt, and $236.3 million of general unsecured claims. Those amounts are used to calculate the recovery ranges shown in the disclosure statement, with first-lien recoveries in the 81.6%–98.4% range and junior funded debt recoveries in the 2.6%–2.8% range.

Only Classes 4 and 5 are voting classes under the plan, while the unimpaired classes are presumed to accept and the cancelled classes are deemed to reject. This structure concentrates the plan vote with the funded debt holders who are trading their claims for a blend of new debt and equity instruments. The disclosure statement also outlines election mechanics that allow first-lien lenders to choose between new term loans, new notes, or increased equity allocations in specified circumstances, and it provides a similar election for junior funded debt holders who may opt into new term loans in lieu of common equity.

The RSA and plan framework provide that first-lien creditors receive subscription rights to new preferred equity, allocations of new term loans or new notes, cash consideration, and warrants, plus an allocation of new common equity. Junior funded debt claims receive cash consideration and a small allocation of new common equity, with an option to receive new term loans in lieu of equity. The plan also includes a new preferred equity investment and a sponsor equity investment to fund distributions and provide exit liquidity.

Summary of estimated recoveries (from the disclosure statement).

The recovery table highlights the plan’s core tradeoff: general unsecured creditors are kept whole while secured and junior funded debt holders trade portions of their claims for equity and new debt instruments. The structure reflects a sponsor-backed deleveraging with new preferred equity at the top of the capital stack and warrants that offer upside to first-lien creditors if operating performance improves post-emergence.

Timeline and Key Milestones

The debtors requested an expedited confirmation schedule that aligns with the prepackaged plan solicitation. The combined disclosure statement approval and plan confirmation hearing is scheduled for mid-March 2026, with a March 3 voting deadline. The plan also includes a narrow subscription window for the new preferred equity investment and related elections. Key dates include:

In addition to the dates above, the debtors proposed an initial plan supplement deadline seven days before the objection deadline and asked the court to waive the requirement for a creditors’ meeting and the filing of schedules and statements of financial affairs if the plan is confirmed within 75 days of the petition date. Those requests are typical in prepackaged cases but signal how tightly the debtors are tying procedural relief to a rapid confirmation timeline.

The solicitation package was distributed electronically on January 27, 2026, with first-class mailings to follow, and the plan sponsor’s preferred equity election materials were scheduled to circulate around the start of the subscription window. These procedural steps are designed to align voting, elections, and plan supplements with the compressed confirmation schedule.

The schedule underscores the debtor’s intent to exit quickly, with solicitation steps already underway before the petition date and a confirmation hearing roughly seven weeks after the filing.

Frequently Asked Questions

Why did Multi-Color Corporation file for chapter 11?

Court filings describe a demand slowdown after the 2021–2022 surge, driven by raw material constraints that later gave way to customer destocking and lower label volumes. MCC reported a 14% revenue decline from 2022 through year-end 2025 and noted that onboarding new customers can take 12–24 months, limiting how quickly lost volume can be replaced. The debtors also faced near-term maturity pressure and a pending default under the 2027 unsecured notes after electing not to pay a $36.2 million interest coupon due January 15, 2026, which would have triggered cross-defaults under the ABL and cash flow credit agreements.

Is this a prepackaged restructuring and who supports it?

Yes. The debtors entered chapter 11 with a prepackaged plan backed by sponsor CD&R and consenting first-lien lenders holding roughly 72.3% of the cash flow revolving facility, term loan, and secured note obligations. Votes were solicited before the filing date, with formal solicitation beginning January 27, 2026. The plan is structured to reduce net debt by about $3.9 billion and provide more than $550 million of exit liquidity.

How much funded debt is being restructured?

The debtors reported approximately $5.9 billion of funded debt, including ABL and cash flow revolving facilities, term loans, secured notes, and unsecured notes. The plan targets a major deleveraging, including about $1.9 billion of new debt at emergence, a $489 million new preferred equity investment, and a $400 million sponsor equity investment. The debt reduction is intended to reset the capital structure around a smaller first-lien debt load and a larger equity cushion.

What happens to general unsecured trade creditors?

General unsecured claims are slated to be unimpaired and reinstated. The plan treats these claims as part of the normal course of business and leaves trade, customer, employee, vendor, and supplier claims whole, a key feature intended to preserve relationships with customers and vendors that support MCC’s labeling operations.

Which classes vote on the plan?

Only Class 4 (first-lien secured claims) and Class 5 (junior funded debt claims) are entitled to vote. The unimpaired classes are presumed to accept the plan, while classes receiving no recovery are deemed to reject. This voting structure focuses the solicitation on the creditor groups receiving the largest equity and new debt allocations at emergence.

What are the projected recoveries for first-lien and junior funded debt?

The disclosure statement projects an 81.6% to 98.4% recovery range for Class 4 first-lien secured claims, reflecting a mix of new debt, preferred equity, common equity, warrants, and cash consideration. Junior funded debt claims (Class 5) are projected to recover 2.6% to 2.8% through a combination of cash and a small allocation of new common equity, with an option to elect new term loans instead of equity.

What is the DIP financing and how much new money does it provide?

The debtors propose a $657.5 million DIP facility that includes $250 million of new money, a 1:1 roll-up of first-lien claims, a $7.5 million backstop premium, and up to $150 million of incremental new money for emergence costs. Up to $150 million is available on an interim basis. The plan sponsor and consenting first-lien lenders are the DIP lenders, and the facility provides superpriority claims and priming liens under the interim order. The debtors reported about $67 million of cash on hand at the petition date but said additional liquidity was needed to fund operations and the restructuring.

What are the key voting and confirmation dates?

The voting and objection deadline is March 3, 2026, at 5:00 p.m. Eastern time. The combined disclosure statement approval and confirmation hearing is scheduled for March 17, 2026, subject to court availability. The schedule reflects the prepackaged structure and the desire to move quickly to emergence.

When is the preferred equity subscription window?

The proposed subscription and election period for the new preferred equity investment runs from March 2, 2026, through March 20, 2026. The subscription period is tied to elections and allocations for first-lien creditors that choose to participate in the preferred equity investment.

Who is the claims agent for Multi-Color Corporation?

Kurtzman Carson Consultants, LLC dba Verita Global serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

For more coverage of chapter 11 filings, see the ElevenFlo bankruptcy blog.