Dec. 31--Chesapeake Corp. is seeking to save its global packaging businesses by selling them through a plan supervised by a bankruptcy court, but the company might not survive as a Richmond-based firm.

The specialty packaging maker filed for Chapter 11 bankruptcy protection Monday in Richmond. The filing enables the 90-yearold company, saddled with a heavy debt load and facing difficult business conditions, to hold creditors at bay while it reorganizes its finances and proceeds with an auction of its assets.

Shareholders likely would get little or nothing out of the deal.

U.S. Bankruptcy Judge Frank J. Santoro yesterday approved the company's motion for $18.5 million in debtor-in-possession financing from a bank group led by Wachovia Corp. The financing, which could be enlarged to $37 million, will help the company keep its businesses functioning during Chapter 11 proceedings.

Chesapeake wants to complete a sale of its business units by March. The company already has a contract -- a so-called "stalking horse" agreement -- to sell substantially all of its assets to a group of investment firms for $485 million, unless another buyer emerges and offers a higher bid at auction.

Founded in Virginia in 1918, Chesapeake is based in Richmond and has an administrative staff here of about 25 people. Most of its manufacturing operations and 5,400 employees are overseas, especially in Europe, where its subsidiaries make paperboard and plastic packaging for health-care, food and beverage products. Its U.S. operations include plants in New York and North Carolina.

All of its business units are continuing to operate, the company said. Its non-U.S. subsidiaries are not part of the Chapter 11 filing.

The investment firms that have agreed to buy the company's assets, including New York-based Irving Place Capital Management LP and California-based Oaktree Capital Management LP, plan to maintain the businesses, Chesapeake said.

Chesapeake said part of the sale plan is for the investment firms to buy the outstanding capital stock or other equity securities of Chesapeake's foreign subsidiaries.

The sale would help the parent company pay off debts, including about $246 million in asset-secured bank loans.

"Basically by using the stalking horse tactic, they are putting in place a reserve price, so it doesn't go at a fire-sale price, and the creditors can recover as much as possible," said Tom Arnold, a finance professor at the University of Richmond.