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Quebecor creditors ask court to either modify or deny company's DIP financing request
By Jennifer Lanning Drey
Portland, Ore., March 4 - Quebecor World (USA) Inc.'s official committee of unsecured creditors objected to the company's debtor-in-possession financing request on the grounds that the company is providing its lenders with more protection than they are entitled, at the detriment of the unsecured creditors.
In a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York, the committee said it wants to modify the final DIP to specify that neither lenders' liens and claims nor the adequate protection liens or superpriority claims can be satisfied from avoidance actions of their proceeds.
The creditors asked the court to deny the DIP motion if the modification is not made.
"The proposed final DIP order and DIP credit agreement, as drafted, serve to benefit the lenders, while inequitably limiting the rights and interests of [Quebecor] and their unsecured creditors," the committee said in the filing.
As previously reported, Quebecor has requested court approval to obtain $1 billion of DIP financing from Credit Suisse and Morgan Stanley.
On Jan. 24, the company received interim approval to use up to $750 million of the funding, which Quebecor said would be used to finance continuing operations and additional working capital.
A hearing for final approval of the DIP facility is scheduled for March 6.
The Montreal-based printing and marketing company filed for Chapter 11 bankruptcy on Jan. 21 in the U.S. Bankruptcy Court for the Southern District of New York and filed for protection under the Companies' Creditors Arrangement Act in Canada. Its Chapter 11 case number is 08-10152.
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