Resource Label Creditors Engage Lazard for Restructuring Talks — WSJ

What happened

Creditors holding a majority of Resource Label Group's first-lien debt hired investment bank Lazard to prepare for restructuring talks with the Ares Management-backed packaging company ahead of debt maturities in 2028, according to people familiar with the matter.

Confirmed

Global impact / market context

Hiring Lazard signals creditors expect trouble repaying debt and want outside advice before 2028 maturities arrive, which means talks could shift who absorbs losses and how Ares Management protects its investment in the company.

Analyst inference

Packaging and label makers face rising supply costs and softer demand, with Multi-Color emerging from chapter 11 this year and Brook + Whittle refinancing debt, showing stress across the sector rather than at Resource Label alone.

Analyst inference

What to watch

1. S&P downgraded Resource Label one notch deeper into junk territory in July, citing a growing cash flow deficit that could lead to a default or distressed exchange, meaning a forced debt restructuring. Confirmed
2. The creditor group and the company could negotiate a debt restructuring before the 2028 maturities, using Lazard for creditors and Evercore and Simpson Thacher & Bartlett for the company. Proposed
3. Watch whether the loss of a key beverage customer and softer demand in health, food and beverage products keep shrinking cash available, which could push negotiations toward a default. Analyst inference

Evidence

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