Vertis' Creditors Object to Auction and Loan Terms
BALTIMORE—A number of Vertis Holdings’ unsecured creditors are balking at the auction and financing proposals, which they feel do not include enough protections for them as the printer proceeds through Chapter 11 a third time, NASDAQ reported.
A committee that represents Vertis’ unsecured creditors have asked a bankruptcy judge to slow down the sale of the company’s print advertising and direct mail marketing business. They say it is being run for the sole benefit of senior lenders, which includes General Electric Capital. The lenders support a $159 million debtor-in-possession financing package. The unsecured creditors’ committee feels the package will only ensure that the lenders get paid, but that it does not cover the Chapter 11 costs or debts owed to the printers’ other creditors, according to NASDAQ.
Vertis also filed Chapter 11 in 2008 and 2010. Quad/Graphics has made a $285.5 million offer for the troubled company, subject to higher bids at an auction Vertis is seeking before year’s end. The unsecured creditors’ committee believes the proposed auction rules fall short of a “fair, flexible and robust sale process,” NASDAQ said.
The committee is seeking allowances for Vertis to adjorn the auction date without Quad’s consent and consider bids for portions of the company’s assets as opposed to all of them. It also wants to consult with Vertis during the sales process, including soliciting rival bids and choosing the winning bid.