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April 4, 2008 |
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QUEBECOR WORLD: Court Allows Assumption of BofA's P-Card Pact Pursuant to Section 363 of the Bankruptcy Code, Quebecor World Inc. and its debtor-affiliates are authorized to use property of their bankruptcy estates to pay Bank of America on account of prepetition amounts due and owing under the existing purchasing card agreement. Pursuant to Section 364(a), the Debtors are authorized to obtain unsecured postpetition financing from Bank of America under an employee purchasing card program. As reported in the Troubled Company Reporter on March 24, 2008 the Debtors sought permission from the U.S. Bankruptcy Court for the Southern District of New York to assume their Purchasing Card Agreement with Bank of America and cure an existing monetary default. In the alternative, the Debtors seek the Court's authority to re-establish a purchasing card agreement with Bank of America. Michael Canning, Esq., at Arnold & Porter LLP, in New York, related that prior to the bankruptcy filing, the Debtors had a purchasing card agreement with Bank of America in which Bank of America issued credit cards to certain of the Debtors' employees to be used in a manner similar to consumer credit cards and constitute unsecured debt obligations to the Debtors. The Debtors have historically used P-Cards for transactions with small vendors or ad hoc purchases in large part to minimize administrative costs for smaller purchasing transactions. The P-Cards serve as substitutes for petty cash, thus reducing the need for the Debtors to keep cash on hand at each of their facilities and permitting the Debtors to make certain payments more efficiently than would be possible using checks or wire transfers. Through 2007, the Debtors had approximately 400 individual card users and processed approximately US$2,000,000 per month in purchases on the P-Cards. The provision of purchasing card services was withdrawn by Bank of America in mid-December 2007, in conjunction with actions taken by Bank of America to reduce credit exposure to the Debtors. As of the bankruptcy filing, the Debtors had an outstanding balance of US$460,000 owing to Bank of America for prepetition charges. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX:IQW) (NYSE:IQW), -- http://www.quebecorworldinc.com/ -- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. Quebecor World has approximately 27,500 employees working in more than 120 printing and related facilities in the United States, Canada, Argentina, Austria, Belgium, Brazil, Chile, Colombia, Finland, France, India, Mexico, Peru, Spain, Sweden, Switzerland and the United Kingdom. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08- 10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/ -- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of US$5,554,900,000, total liabilities of US$3,964,800,000, preferred shares of US$175,900,000, and total shareholders' equity of US$1,414,200,000. The company has until May 20, 2008, to file a plan of reorganization in the Chapter 11 case. The Debtors' CCAA stay has been extended to May 12, 2008. (Quebecor World Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating to the US$400 million super priority senior secured revolving term loan facility of Quebecor World Inc. as a Debtor-in-Possession. The related US$600 million super priority senior secured term loan was rated Ba3 (together, the DIP facilities). The RTL's better asset value coverage relative to the TL accounts for the ratings' differential. |
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