Quiksilver joint plan of reorganization objected to by U.S. trustee

By Mark Reccek

Bethlehem, Pa., Jan. 15 – Quiksilver, Inc.’s confirmation of the second amended joint plan of reorganization was objected to by U.S. trustee Andrew R. Vara, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

Vara specifically takes issue with the inclusion of the exculpation provision, arguing none of the additional entities defined as exculpated parties serve as an estate fiduciary or a professional representing an estate fiduciary. The other parties include the backstop parties, the plan sponsor, the debtor-in-possession agents and the secured notes agent, for instance.

Vara contends such parties should be removed from the plan’s definition of exculpated parties.

“The only parties eligible for exculpation in these cases are the debtors, the debtors’ officers and directors serving during the Chapter 11 cases in their capacity as such, the committee and their respective attorneys, financial advisors and other professionals,” the objection said.

The plan confirmation hearing is scheduled for Jan. 27.

As previously reported, based on the disclosure statement, the company will enter into a $120 million exit facility, which will fund plan distributions for debtor-in-possession facility lenders.

Quiksilver said the proposed plan will provide for the payment in full of all administrative expenses and allowed priority claims.

Holders of allowed secured note claims will receive new common stock.

Holders of allowed unsecured claims will receive an allocated portion of $7.5 million in cash proceeds, which will be funded by an exit rights offering.

Holders of guaranty euro note guaranty claims will have their claims reinstated.

Old Quiksilver securities will be canceled under the plan.

Quiksilver, an outdoor sports lifestyle company based in Huntington Beach, Calif., filed for bankruptcy on Sept. 9. The Chapter 11 case number is 15-11880.

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