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Canadian court OKs Quebecor World reorganization plan
NEW YORK (Reuters) - A Canadian judge on Tuesday approved the reorganization plan of bankrupt commercial printer Quebecor World Inc IQW.TO, clearing one of the company's biggest hurdles to exiting bankruptcy protection.
Judge Robert Mongeon of the Quebec Superior Court in Montreal said during a joint hearing with the U.S. bankruptcy court in Manhattan that he would sanction the company's plan under the Canadian Companies' Creditors Arrangement Act (CCAA).
Quebecor World, which expects to emerge from its insolvency proceedings in July, prints books, magazines, directories and advertising materials. It filed for court protection in January 2008 and currently has about 20,000 employees.
At the court hearing on Tuesday Judge James Peck of the U.S. bankruptcy court in Manhattan recognized the Canadian court's ruling on the reorganization plan. The company is still awaiting confirmation of its U.S. reorganization plan from Judge Peck. A court hearing on that confirmation was ongoing.
Last week, the Montreal-based company said about 86.4 percent of all voting creditors across classes had voted to accept the company's third amended U.S. reorganization plan.
Creditors approving the U.S. plan represented 88.9 percent, or $1.82 billion, of the total dollar value of claims voted.
The company's second amended and restated Canadian plan of reorganization was approved by about 96 percent of the affected creditors, representing about 89 percent of the total value of claims voted.
During the court hearing on Tuesday some members of the company's bank syndicate challenged several technical aspects of Quebecor's reorganization plan, despite having earlier voted in favor of the plan. The bank syndicate said certain agreements they had expected were missing from the plan presented to the court.
Judge Peck said that the bank syndicate was causing "an unnecessary crisis" that could upend the company's reorganization and restructuring efforts.
The U.S. and Canadian courts asked the bank syndicate to negotiate with the company and its other lender groups and set a July 13 court date to hear any remaining issues related to the bank syndicate's concerns on the reorganization plan.
(Reporting by Emily Chasan and Phil Wahba, editing by Matthew Lewis)
