More Woes for Quebecor World
MONTREAL—Bankruptcy-protected Quebecor World has decided against challenging The Economist magazine’s attempt to opt out of its printing contract. The Economist Newspaper N.A., publisher of The Economist, notified Quebecor World that it intends to terminate their printing agreement at the expiration of the initial term this September.
The publisher asked U.S. Bankruptcy Court Judge James Peck for permission to serve the notice to Quebecor World. Still, both sides are in talks regarding a possible extension of the deal, which would have automatically renewed had The Economist not given notice prior to March 31.
Under bankruptcy rules, all changes to contracts are frozen pending a resolution of the debtor claims. Peck was scheduled to hold a March 27 hearing to discuss the matter.
Quebecor World also asked for approval from bankruptcy court to pay managers $4.6 million in performance bonuses earned prior to its Chapter 11 filing, according to a report in the Lincoln (NE) Journal Star.
The struggling printer filed the request with the U.S. Bankruptcy Court in New York in order to dole out incentive-based bonuses that 376 managers earned for their performance in the second half of 2007, the paper reported. The move comes on the heels of Quebecor World’s failure to negotiate new terms for a $1 billion loan for financing operations during the bankruptcy period.
Judge Peck gave Quebecor World a 30-day extension before hearing its request for the debtor-in-possession financing. Peck also granted a 90-day extension, until June 4, for filing its list of assets and liabilities.
As for the bonuses, the Journal Star reported that they range from $700 to nearly $132,000. Should Quebecor World be unable to reward the key managers, the fear is they might choose to find employment elsewhere, the paper said.