Quiksilver Gains Court Approval for Oaktree Bankruptcy Loan

by San Antonio Attorney

Quiksilver, an American and Australian based company, recently won court approval for $175 million dollars in bankruptcy financing.  This is also based by an agreement with Oaktree Capital Management for the purpose of supporting Quiksilver’s reconstruction after the investment firm arranged to drop a $US20 million severance fee.

The financial agreement placed Oaktree in command to take over the surfwear retailer by the end of January.

Oaktree was highly encouraged to revise its terms after creditors pressed a bankruptcy judge in Wilmington, Delaware, to approve a finance proposal from Brigade Capital Management.  The creditors insisted this proposal was better and more feasible and would eventually allow Quiksilver to initiate selling.

“The two proposals represent a competing vision of how Quiksilver should restructure with Brigade pushing for a sale and Oaktree opting for a balance-sheet restructuring,” said Brendan Shannon, a US Bankruptcy Judge, stating the possible options for the future of the company last Thursday.

Shannon went on to elucidate that the Oaktree deal will give leeway to Quiksilver to explore better deals available without compromising the restructuring plan.

Shannon also discussed the decision after Oaktree reassured him that Quiksilver is still viable throughout the bankruptcy process. However, Shannon also stated that he was besieged with the severance fee, since Oaktree will still collect funds should Quiksilver choose another buyer to support its financial goal.

“Oaktree’s prepared to walk away from the break-up fee.  We are not going to make your honour make that decision,” said Patrick Nash, a legal representative for Oaktree.

Following the Oaktree back-up plan, Quiksilver would enjoy the benefit of exiting court protection with an amount of 500 million dollars less.  Oaktree owns a majority of 73 per cent of the chain’s $US279 million. This would be traded for a majority of the reorganised company’s equity.  The creditors, who were owed more than $US200 million, will be given an amount of $7.5 million dollars to divide among themselves. Oaktree also provides $115 million to aid in fund operations.

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