Quebecor unit granted bankruptcy
EmptyTORONTO -- Quebec printing giant Quebecor World secured bankruptcy protection in Canada and the U.S. on Monday, a day after it failed to agree terms on a financial rescue package.
Justice Robert Mongeon of the Quebec Superior Court in Montreal granted creditor protection to Quebecor World after he was told by company lawyers that the commercial printer, a division of Quebec media giant Quebecor, was within days of running of out of money.
Justice Mongeon ruled that Quebecor World was "in serious need of relief" and would receive protection under the federal Companies' Creditors Arrangement Act.
Earlier in the day, Quebecor and its cable and broadcast division Quebecor Media said in a statement that they would be unaffected by the decision of Quebecor World to go to court for creditor protection.
"Quebecor and Quebecor Media are both in excellent financial health and the outlooks for the future of the businesses are excellent," Pierre Karl Peladeau, president and CEO of Quebecor and Quebec Media, said in a statement.
Lawyers for Quebecor World told the Quebec Superior Court that, on Sunday, the struggling company failed to meet conditions for a $400 million financial rescue package from the private equity arm of Brookfield Asset Management.
"We are days from a total liquidity collapse. If the company doesn't get the emergency debt financing it is seeking, it will run out of cash by Thursday," Derrick Tay, a lawyer for Quebecor World, told the court.
Quebecor Media's core assets include Groupe Videotron, the Quebec cable giant, TVA Group, the private Quebec TV network and a stable of cable channels.