Billing and marketing firm OSG Group files prepackaged Chapter 11 case

The word ‘Bankruptcy’ is painted on the side of a vacant building in Detroit, Michigan July 26, 2013. REUTERS/Rebecca Cook

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  • OSG Group plans to reduce debt by $134 million
  • The company cited rising printing costs, reduced mail demand and malware as reasons for its bankruptcy
  • DOJ opposes OSG’s quick timeline for bankruptcy filing

(Reuters) – OSG Group Holdings Inc, a billing and marketing company that operates in 19 countries, filed for Chapter 11 protection on Saturday with a plan to reduce debt by about $134 million from its balance sheets.

OSG, which provides printing, mail, digital communications and payment services to customers in various industries and countries, cited high debt loads, increased printing costs and reduced demand for mail services as reasons. of its bankruptcy, according to court documents filed in Wilmington, Delaware.

The New Jersey-based company filed for bankruptcy with $824 million in debt and offered a restructuring plan this would reduce overall debt to $690.3 million and allow the company to exit Chapter 11 by the end of August.

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OSG Group won creditor support for the plan before filing for bankruptcy, and it plans to seek approval for the restructuring at a court hearing on August 26, according to court documents.

The company had tried to address long-term business risks by investing in digital services, but those efforts took a hit after two malware attacks caused significant disruption in 2021, court documents show.

The malware attacks prevented the company from responding to multiple customer requests for weeks and ultimately resulted in a $30 million drop in revenue, with customers in Europe, the Middle East and Asia transferring their orders to other service providers, according to court documents.

OSG could not be reached for comment on Monday.

According to court documents, the proposed restructuring would honor debts to junior creditors and return the company’s equity to its lenders. OSG’s current owner, private equity firm Aquiline Capital Partners LLC, would retain a portion of the company’s equity through loans it made to the company prior to bankruptcy.

The company had approximately $2.3 million in cash when it filed for bankruptcy, and it will seek to fund its bankruptcy filing with a $25 million loan from existing junior lenders. Part of the loan will be converted into shares rather than repaid in cash, according to court documents.

The Justice Department’s Bankruptcy Watchdog objected Monday on OSG’s proposed schedule, saying it had failed to give enough notice to creditors likely to be affected by the bankruptcy, including UK-based shareholders and employees with OSG-funded pension plans .

OSG will appear in court on Tuesday to seek approval of the proposed schedule and $25 million bankruptcy loan.

The case is In Re OSG Group Holdings Inc, US Bankruptcy Court for the District of Delaware, No. 22-10718.

For the OSG group: Gregg Galardi and Cristine Pirro Schwarzman of Ropes & Gray

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