Reader's Digest Creditors Blast $105M DIP Loan

Law360, New York (March 20, 2013, 3:06 PM EDT) -- Unsecured creditors of the bankrupt Reader's Digest Association Inc. told a New York federal bankruptcy judge Tuesday that a $105 million debtor-in-possession loan between the company and a cohort of private equity groups wrongfully prevents them from cashing in on proceeds from trustee lawsuits.

The bankruptcy’s official committee of unsecured creditors say that part of the deal — crafted by the so-called new money lenders Apollo Investment Corp., Goldentree Asset Management LP and Empyrean Capital Partners LP — would assert an unfair lien on future avoidance...
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