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Hollinger granted preliminary injunction to protect assets from creditors
By Reshmi Basu
New York, Aug. 10 - Hollinger Inc. obtained a preliminary injunction in its Chapter 15 bankruptcy case to keep some noteholders from taking over the company's assets and standing in the way of the formulation of a Canadian Companies' Creditors Arrangement Act bankruptcy plan, according to a Friday ruling from the U.S. Bankruptcy Court for the District of Delaware.
Judge Peter J. Walsh extended a protective order that prevents bondholders from seizing shares of Sun Times Media Group, Inc. during the Canadian bankruptcy proceedings.
In his ruling, Walsh wrote that without the restraining order, "there is a material risk that the debtor's assets located in the United States could be subject to attack by creditors."
As previously reported, Hollinger had already been granted a temporary restraining order in the Chapter 15 case and a 30-day stay of proceedings by the Ontario Superior Court of Justice.
The company had said it needed protection in the United States to allow it to implement a strategy for its Sun Times shares that will allow it to maximize creditor recovery and negotiate with claimants who will come forward in response to the CCAA proceedings in the view of ultimately formulating a bankruptcy plan.
Hollinger said in the filing that wrongful acts initiated by parent Ravelston Corp. and others have left the company with only one major asset, its substantial equity interests in Sun Times Media Group.
Toronto-based Hollinger's principal asset is Hollinger International, which is a newspaper publisher that owns the Chicago Sun-Times. Hollinger filed its CCAA proceedings and Chapter 15 bankruptcy on Aug. 1. Its Chapter 15 case number is 07-11029.
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