Portola Packaging, Inc. Files for Pre-Packaged Chapter 11 Reorganization after Obtaining...

Portola Packaging, Inc. Files for Pre-Packaged Chapter 11 Reorganization after Obtaining the Support of Its Lenders and Bondholders

BATAVIA, Ill.--(Business Wire)--
Portola Packaging, Inc.:

-- Company Files Chapter 11 Petition For Its Previously Announced
Pre-Packaged Reorganization After Receiving Overwhelming
Support from 100% of the Company's Secured Lenders and Holders
of Approximately 90% of its Senior Notes

-- Company Secures $79 Million DIP Financing To Secure Ongoing
Operations

-- Company Will Reduce Long-Term Debt Obligations by $180 Million

-- Chapter 11 Reorganization Not Expected To Impact On-Going
Business Relationships

-- Trade Creditors, Suppliers And Customers To Be Paid In The
Ordinary Course Of Business

-- Company Appoints New Board to Manage Restructuring

Portola Packaging, Inc. (the "Company"), one of the largest
manufacturers of tamper-evident closures, plastic containers and
related products and engineering services for the dairy, juice and
water industries, announced today that it filed a voluntary Chapter 11
petition to reorganize in the United States Bankruptcy Court for the
District of Delaware. In connection with the filing, the Company
confirmed that all of its secured lenders and holders of approximately
90% in aggregate principal amount of its 8-1/4% Senior Notes due 2012
agreed to a voluntary and consensual restructuring of the Company
pursuant to the previously announced Restructuring Support Agreement
dated July 24, 2008. Pursuant to the proposed plan of reorganization,
holders of the Senior Notes will receive 100% of the common stock of
reorganized Portola in exchange for their claims. Wayzata Investment
Partners LLC is expected to be the Company's controlling shareholder
upon the Company's emergence from bankruptcy. The Company's plan of
reorganization will reduce its long term debt obligations by $180
million. The Company anticipates completing its pre-packaged
reorganization and emerging from Chapter 11 in mid-October, 2008.

Importantly, under the restructuring plan, all obligations owed to
trade creditors, suppliers, customers and employees in the ordinary
course of business will be unimpaired and unaffected by the
restructuring.

The Company also announced today that it has reached agreement
with its existing secured lenders to provide the Company with
debtor-in-possession financing of $79 million to pay off the
outstanding indebtedness under the Company's existing secured
facilities and to finance its ongoing operations.

The Company also announced that its President and Chief Executive
Officer, Brian Bauerbach, and its Chief Financial Officer, John
LaBahn, and its General Counsel, Kim Wehrenberg, have been appointed
as the sole directors of the Company and will oversee the
restructuring. The Company thanks the outgoing directors for their
service and support of the Company and the Restructuring Support
Agreement.

Mr. Bauerbach stated, "We are pleased to have achieved such strong
support for a consensual restructuring that dramatically improves our
balance sheet, reduces our annual cash interest obligations by
approximately $15 million, and enables continued reinvestment in our
products and future growth. We are thrilled to have the continued
support of Wayzata and look forward to its long term commitment to the
business."

In connection with the filing, Portola is seeking approval for a
variety of first day motions that will allow it to continue to manage
operations in the ordinary course. The motions include requests to
make wage and salary payments and other benefits to employees and to
pay critical vendors, suppliers, trade creditors and certain other
pre-petition trade claims. This relief will allow the Company to
operate its business without interruption while it restructures. The
Company will also seek interim approval of its $79 million
debtor-in-possession financing. The motions are typical in Chapter 11
bankruptcy cases and court approval is expected to be granted
promptly. The restructuring plan provides for payments to providers of
goods and services delivered post-petition in the ordinary course of
business.

About Portola Packaging, Inc.

Portola Packaging is a leading designer, manufacturer and marketer
of tamper-evident plastic closures used in dairy, fruit juice, bottled
water, sports drinks, institutional food and other non-carbonated
beverage markets. The Company also produces a wide variety of plastic
bottles for use in dairy, water and juice markets, including various
high density bottles, as well as five-gallon polycarbonate water
bottles. In addition, the Company designs, manufactures and markets
capping equipment for use in high speed bottling, filling and
packaging production lines. Portola is also engaged in the manufacture
and sale of tooling and molds used for blow molding. Portola's
subsidiary, Portola Tech International, is also a leading
manufacturer, marketer and designer of plastic packaging components
for the cosmetic, fragrance and toiletries industry. For more
information about Portola Packaging, visit the Company's web site at
www.portpack.com.

Portola Packaging, Inc.
John G. LaBahn
Senior Vice President
Chief Financial Officer
(630) 326-2074

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