Questex Media Group (“Questex Media”) and its 8 affiliates who also filed bankruptcy on October 5, 2009 (the “Debtors”) have requested authority to file a consolidated list of the 30 largest unsecured creditors (the “Top Unsecured Creditor List”) in lieu of a separate list for each of the Debtors. The total claims of the 30 top unsecured creditors is substantial, exceeding $66 million. However, the amount of vendor debt on the list appears only to be approximately $2 million. Although vendor debt was not a factor in the decision to file this bankruptcy, the suppliers and other vendors with pre-petition claims will suffer significant “collateral” damage.
The Debt Picture; Prospects of Pre-Petition Claim Recovery
The Debtors estimate that they have, on a consolidated basis, outstanding pre-petition payments due vendors in the amount of approximately approximately $3 million. This is spread among approximately 100 vendors. This represents a very low percentage of the total pre-petition liabilities of the Debtors. These liabilities are described in the declaration of Thomas E. Caridi, Chief Financial Officer and Executive Vice President (the “Caridi Declaration”) as follows:
As of the Petition Date, Questex has approximately $242 million in total funded secured debt, consisting of approximately $186 million of first lien debt and approximately $56 million of second lien debt. Questex also has approximately $41 million outstanding (including accrued interest) on account of the unsecured notes issued to, and approximately $18.5 million in accrued outstanding and unpaid “earnouts” owed to, the former principals of previously acquired companies.
Any chance of recovery of pre-petition claims by vendors is extremely low. The Debtors filed an essential supplier motion for payment of pre-petition supplier claims of critical vendors, but amount of pre-petition vendor payments Debtors seek authority to pay is limited to $200,000.
This case has the potential to generate preference claims. That risk should be monitored by the unsecured creditors.
List of Top Unsecured Creditors
The Debtors have listed the following creditors as being their top 30 largest unsecured creditors. The following list does not include any creditor contact information that may have been included by the Debtors.
|Name of creditor||Nature of claim||Indicate if claim is contingent, unliquidated, disputed or subject to set off||Amount of claim|
|Wilmington Trust FSB[FN]||Bank Debt||Unliquidated||$56,554,063.62|
|Former Shareholders of FierceMarkets||Former Shareholders||$7,533,018.00|
|RR Donnelley Receivables, Inc.||Trade Debt||$587,114.01|
|Cigna Healthcare||Trade Debt||$251,538.55|
|Paradice Decorating Company||Trade Debt||$247,701.80|
|Midland Paper||Trade Debt||$124,076.84|
|Metropolitan Exposition Services, Inc.||Trade Debt||$118,245.80|
|UC Funding Corp.||Trade Debt||$117,742.80|
|Hallmark Data Systems, LLC||Trade Debt||$107,597.90|
|Microsoft Licensing GP||Trade Debt||$106,414.47|
|Hyatt Regency Boston||Trade Debt||$97,804.68|
|Pro Print Inc.||Trade Debt||$92,090.79|
|Hyatt Regency San Francisco||Trade Debt||$85,486.05|
|BS Inc.||Trade Debt||$58,333.31|
|Bank of America MasterCard||Trade Debt||$55,253.28|
|American Express||Trade Debt||$45,107.42|
|Get Vamp LLC||Trade Debt||$37,017.00|
|Insight Direct USA, Inc.||Trade Debt||$31,576.94|
|Dell, Inc.||Trade Debt||$28,885.52|
|Weiss Foodservice Visions, Inc.||Trade Debt||$25,466.01|
|Lambert Smith Hampton||Trade Debt||$23,922.21|
|Coach Media, Inc.||Trade Debt||$23,590.00|
|Infobeans System India Pvt. Ltd.||Trade Debt||$23,382.00|
|Mark Facey & Company||Trade Debt||$21,856.50|
|Telenix, Inc.||Trade Debt||$20,493.25|
|Orient Express Hotels||Trade Debt||$20,343.00|
|N-M Ventures||Trade Debt||$19,379.54|
|Advanstar Communications, Inc.||Trade Debt||$16,570.00|
[FN] [The claim of Wilmington Trust FSB is footnoted as follows.] In light of the fact that the lenders under the Debtors’ First Lien Credit Agreement have credit bid for substantially all of the Debtors’ assets at an amount less than the full value of their claims, in an abundance of caution, the Debtors have included the agent for the lenders under the Second Lien Credit Agreement.
The Top 30 List does not include: (1) persons who come within the definition of “insider”; or (2) secured creditors, unless the value of the collateral is such that the unsecured deficiency places the creditor among the holders of the largest unsecured claims. The Top Unsecured Creditor List is based on the Debtors’ books and records as of October 2, 2009.
Bankruptcy Rule 1007(d) provides that a debtor shall file “a list containing the name, address and claim of the creditors that hold the 20 largest unsecured claims, excluding insiders.” Fed. R. Bankr. P. 1007(d). In the case of a multi-debtor filing, it is likely that many creditors are shared among certain of the debtors. This is especially the case where the debtors operate as a single business enterprise. Under these circumstances and provided that there is a request for joint administration, it is common for multiple, related debtors to request authority to file a single, consolidated list of their collective largest general unsecured creditors. These requests usually are granted by the bankruptcy court.
The Top Unsecured Creditor List is never to be considered a waiver of any defense to or “allowability” of a listed claim or an admission of the amount of any listed claim. It is common for the amount of the claims to shift and sometimes a claim that is initially is undisputed is later disputed. Creditors should always consult the official claims register.