Truvo, Backers Seek Injunction Against 'Dissident' Creditors

13th Jul 2010 18:42

By Patrick Fitzgerald Of DOW JONES DAILY BANKRUPTCY REVIEW A group of lenders backing Truvo Group's restructuring want a bankruptcy judge to bar a group of so-called dissident creditors from scuttling the European directory publisher's reorganization bid. In a filing Monday in Truvo's bankruptcy case, a group calling itself the coordinating committee of senior lenders it "strongly supports" Truvo's bid for an injunction against would-be dissident lenders and bondholders who might seek to torpedo the company's restructuring efforts. "Unless this court grants that relief the Truvo Group's senior lenders will be subjected to a serious risk that dissident creditors could scuttle the debtors' ability to effectively reorganize under the terms of a plan of reorganization that is supported by creditors holding almost 80% of the Debtors' only 'in the money' debt," the lenders said in court papers. Truvo USA and four other holding companies at the top of the Truvo Groups' corporate structure filed for Chapter 11 protection earlier this month in U.S. Bankruptcy Court in Manhattan after reaching deal on a debt-for-equity swap with a majority of its senior lenders. The company is seeking to block potential opposing creditors from seeking to foreclose on its European operations to collect their debts. Dozens of lenders--whose number includes structured finance vehicles as well such banking giants as Deutsche Bank AG (DB), Bank of America Corp. (BAC) and Barclays PLC (BCS)--owed about $296 million haven't signed onto the plan. Also, bondholders owed more than $700 million are out of the money and would see no recovery unless they vote to support the company's bankruptcy plan, according to court papers. If the bondholders opt to support the plan, however, they'll get a stake in the reorganized company. Truvo and its backers want U.S. Bankruptcy Court Judge Arthur J. Gonzalez to issue an injunction blocking any would-be dissident creditors from trying to seize the European assets, which, they say, would destroy the company's best opportunity to reorganize. A hearing on Truvo's bid for an injunction against any efforts by would-be dissident creditors to go after its European operations is scheduled for Wednesday in Manhattan. Truvo, formerly called VNU World Directories, is a directories and advertising company owned by buyout firms Apax Partners and Cinven Group. The company, founded in 1967 and based in Belgium, was bought by Apax and Cinven for roughly EUR2.2 billion ($2.8 billion), including debt, in September 2004. It sells advertising through local search sites and produces white-page and yellow-page directories in several European countries. The debt-laden company's sales nosedived in recent years as print use declined and advertising slumped amid the worldwide economic downturn. It reported a net loss of more than $330 million last year. (Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection) -By Patrick Fitzgerald; Dow Jones Daily Bankruptcy Review; 202-862-3544; [email protected] (Christopher Bjork and Marietta Cauchi contributed to this story). (END) Dow Jones Newswires July 13, 2010 13:42 ET (17:42 GMT)