Debt Collector Intrum AB Clears Major Hurdle in Restructuring Plan
A significant obstacle has been overcome by Sweden’s Intrum AB, a leading debt collector, as a US bankruptcy judge has confirmed its debt restructuring plan despite opposition from a minority group of creditors.
Judge Rules in Favor of Intrum AB
Judge Christopher Lopez’s ruling came after a lengthy hearing in Texas, where attorneys for Intrum and opposing creditors presented their arguments. Lopez stated that there was no intention to defraud or harm any particular creditor group, and that the filing was made in good faith.
Creditor Support for the Plan
The judge’s decision was influenced by the fact that creditors owed over $3.5 billion voted to accept the plan. This demonstrates a significant level of support for the restructuring effort. Furthermore, only 6% of creditors objected to the plan, highlighting the broad acceptance of the proposal.
Opposition from Minority Group
A minority group of creditors, including Diameter Capital Partners, had opposed the plan, arguing that it did not reflect the temporary priority of their bonds in the repayment process. They also contended that there was no international agreement to honor the order of the US bankruptcy court and that a restructuring must be approved in Sweden.
Background of the Case
Intrum AB sought court protection in Texas in November to address its debt burden, which had become unsustainable due to rising interest rates. The company reached a deal to restructure its 58.4 billion krona ($5.3 billion) debt pile earlier this year with the support of 82% of its creditors.
Preserving the Debtor’s Ability to Operate
The confirmation of the restructuring plan is a crucial step in preserving Intrum AB’s ability to operate as a going concern. As company attorney Andrew M. Leblanc noted, “If this restructuring is done, it’s going to preserve the debtor’s ability to operate as a going concern.”
Case Details
The case is Intrum AB, 24-90575, US Bankruptcy Court, Southern District of Texas.
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