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Ardagh is preparing to file for a Judicial Reorganization Procedure in Luxembourg, as an impasse remains between Ardagh advised by Kirkland & Ellis and Houlihan Lokey, and its PIK holders advised by White & Case, according to sources.

The consent solicitation for the packaging firm’s current restructuring deal, which was launched on 29 September, expires on Monday (27 October) at 5pm New York time. After the consent solictation expires Ardagh will look to launch a Luxembourg restructuring process, the sources said.

Parties to the packaging company’s debt restructuring have continued to assess their options as a group of PIK noteholders remained the only hurdle to completing a comprehensive out-of-court restructuring that would see first lien holders get full recoveries and then some, while unsecureds will wind up owning the company.

It was potentially a deal where if the company performed, the secured and unsecured lenders alike stood to gain a full recovery — with the one class of creditor seemingly getting crushed being the roughly $2bn in PIK notes, which were getting nothing in cash and 7.5% post-reorg equity. For one, holders of PIK debt have taken issue with the fact that Ardagh’s chairman Paul Coulson is getting a $300m payout whereas they get fully written off, according to sources.