A key hearing in the Quiksilver bankruptcy case will continue to a second day tomorrow.
A judge is expected to rule on whether Quiksilver should adopt a debtor in possession (DIP) loan from Oaktree Capital Management or accept another offer from Brigade Capital Management, which is championed by the Committee of Unsecured Creditors.
The court will also decide if Quiksilver can adopt a plan sponsorship agreement (PSA) proposed by Oaktree, though a final plan of reorganization will still need to be approved by the court at the end of the bankruptcy process.
(See our more detailed story about why the Creditor’s Committee is objecting to the Oaktree plan.)
One nugget that made headlines courtesy of reporting by Bloomberg was that a representative of Quiksilver’s investment banker, Peter J. Solomon Co., testified today that “at some point” Oaktree may join Quiksilver and Billabong together.
The investment banker said he hasn’t approached Oaktree about such a plan, according to Bloomberg.
Oaktree owns 19.2% of Billabong’s stock, which is not a controlling interest.
SES asked Billabong for comment about the speculation that the two companies may be joined in the future.
“If another industry brand’s investment bankers want to engage in speculation in or out of court that’s their call,” a company spokesman told us. “They are most certainly not speaking for Billabong.
“We are focused on our strategy because that strategy is working,” the spokesman continued. “And the message right throughout Billabong globally has been, remains and will continue to be, focus totally on our customers and what we’re doing.”
Quiksilver’s bankruptcy filing comes at time when Billabong is gaining ground in the U.S. market, particularly with its Billabong and RVCA brands. Retailers we speak to are very happy with Billabong and RVCA’s direction, and the solid management team that has been assembled, a team that is comprised of many industry veterans.
We hear Billabong management is urging employees to ignore the rumors and speculation, and assuring them no one shareholder controls the company.
The court is also expected to decide if Quiksilver can pay its critical manufacturing vendors, which the company says is crucial for Quiksilver to receive its spring goods on time. The Committee wants more proof that the vendors are truly critical to business operations.
The court had approved paying the vendors on an interim basis, and will now make a final ruling on the matter.
