Quebecor World gets court OK of exclusivity extension, go-ahead to hire three auditing firms

By Rebecca Melvin

New York, April 17 - Quebecor World (USA) Inc. obtained a four-month extension to its exclusive periods to file a plan of reorganization and solicit votes on the plan by the U.S. Bankruptcy Court for the Southern District of New York on Thursday.

The company's exclusive plan-filing period was extended to Sept. 30 and the solicitation period to Nov. 28, 2008.

Quebecor counsel Michael Canning of Arnold & Porter told the court that much progress has been made in the case to date, including progress toward a potential plan of reorganization that involved cooperative discussion with the unsecured creditors committee.

"However, we're not ready to put a stake in the ground in any meaningful way," Canning said.

The creditors committee was in favor of the motion, saying that it felt it was a fair amount of time.

Also approved by the court on Thursday was the company's request to retain a trio of accounting firms, including Ernst & Young LLP and two KPMG LLP firms, to work on different aspects of Quebecor's tax requirements and reorganization.

The company is retaining Ernst & Young at an hourly rate to see what restructuring may be appropriate at the entity level, Canning said.

The KPMG firms, one being located in Canada, will deal with compliance and serve as tax consulting advisers.

Due to the magnitude of the job and the necessity to be in compliance with escalated tax requirements, the company believes the three firms are necessary to understand fully its tax risks, Canning said.

Also on Thursday, the court approved an order that is consistent with the cross-border insolvency protocol confirming authority under Canadian court order of Quebecor to make payments to certain employees in exchange for non-complete agreement.

Due to what was considered confidential aspects of this motion, declaration was filed under seal.

Judge James Peck said that he was satisfied with the non-complete agreements, and that he was prepared to approve them since there were no objections from the creditors, bondholders, or lenders, all of whom had an opportunity to review the proposed arrangements.

In addition, the committee of unsecured creditors obtained approval to retain Bennett Jones LLP as Canadian counsel.

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