A report by Jacqueline Palank of Dow Jones & Company, which is owned by News Corp., indicates a group of unsecured creditors are opposed to the auction and financing proposals of Vertis Holdings Inc., which last week announced it had again filed for Chapter 11 bankruptcy protection.
In close proximity to its Chapter 11 filing, Vertis announced it had signed an agreement with Quad/Graphics Inc. of Sussex, Wisconsin, which would purchase substantially all of Vertis’ assets for US$258.5 million.
Palank writes that unsecured creditors feel the auction and financing proposals do not include enough protections to make sure they are not left holding the bag during the company’s third time through the Chapter 11 process.
The official committee representing Vertis’s unsecured creditors, Palank explains, are urging a bankruptcy judge to slow down the sale of Vertis’s print advertising and direct-mail marketing business, which they say is being run for the sole benefit of senior lenders led by General Electric Capital Corp.
See Palank’s full report at dowjones.com.