Quebecor World committee looks to sue noteholders for return of $376 million in alleged preference payments

By Caroline Salls

Pittsburgh, Sept. 15 - Quebecor World (USA) Inc.'s official committee of unsecured creditors requested court approval to file a $376 million avoidable preference payment lawsuit against the holders of private unsecured senior notes, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Specifically, the committee wants to file a complaint to avoid and recover roughly $376 million of preference payments allegedly made to the noteholders by Quebecor affiliate Quebecor World Capital Corp. during the three months before the company filed for Chapter 11 bankruptcy.

The payments were made in order to redeem some of the private notes, according to the proposed complaint.

The committee said the company made the payments to the noteholders while it was insolvent.

In addition, the committee said the noteholders received more than they would have been paid under a Chapter 7 liquidation and if they received payment of the amount owed on the notes under specific provisions of the Bankruptcy Code.

Quebecor, a Montreal-based printing and marketing company, filed for Chapter 11 bankruptcy on Jan. 21, 2008 and filed for protection under the Companies' Creditors Arrangement Act in Canada. Its Chapter 11 case number is 08-10152.

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