Pac Pac, the company La Tercera describes as the largest supplier of paper bags to retailers, applied to Santiago's 12th Civil Court for reorganization proceedings. According to La Tercera, its liabilities total $2,721 million. No other media outlet has confirmed the information.
Reorganization is an insolvency proceeding, meaning a judicial process designed for companies in difficulty. It works like a negotiating table supervised by a court. The company proposes a plan to its creditors to pay its debts without closing, thereby avoiding liquidation, which is bankruptcy itself.
The company operates in Chile, Peru, Ecuador and Panama. It is linked to businessman Juan Pablo González Pellegrini and is advised by Ricardo Reveco, a partner at the Carey law firm and a specialist in restructuring companies under financial stress.
If you have ever left a store with a branded paper bag, it probably came from this factory. Its clients include GAP, Puma, Levi's, Tommy Hilfiger, Americanino, Corona, Crocs, Adidas and The North Face. It also works for Samsung, Movistar, WOM, Entel, Falabella and Homy. At its peak, it sold between four and five million bags a month.
According to the list of liabilities it submitted to the court, its three largest creditors are Banco Santander, with loans totaling $456 million; Suzano, a Brazilian-owned paper company, with $275 million; and FPC Papeles, with $204 million.
Suppliers of goods and services account for 45% of the debt. Another 37% comes from financing, and 15% from obligations to related companies.
In its filing, the company attributes its situation to several factors. After the Covid-19 pandemic, new competitors arrived with "substantially lower" prices, driven in part by large industrial conglomerates. This reduced its customer base and sales volumes.
In response, Pac Pac lowered its prices across the board. At the same time, it faced fixed costs that were difficult to cut, such as rent for its production facilities and interest on its debt.
The result was a liquidity problem, meaning a lack of cash to meet immediate payments. The company could no longer buy paper on international markets and had to source it exclusively in Chile, at an additional cost. According to the filing, debt accumulation accelerated during 2024 and 2025, leading to its current insolvency.
The company says that before turning to the court, it sought financing, cut costs and privately renegotiated part of its debt. It failed to reach an agreement with all its creditors.
The source does not detail how the process would affect supplies to stores. The next step is for Santiago's 12th Civil Court to rule on the application. If it grants it, Pac Pac will have to present its creditors with a proposal to pay the $2,721 million and keep operating.
