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Mega seeks U.S. protection

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  • Mega seeks U.S. protection

    There you go gents, the day finally arrived.

    Mike what have you done again?

    Mega seeks U.S. protection

    Toymaker files under chapter 15:
    Move typically used to prevent creditors from tying up assets in that country

    Montreal toymaker Mega Brands Inc. has petitioned a bankruptcy court in the United States to sanction its planned recapitalization vote next month.

    The manufacturer of big building blocks and Battle Strikers spinning tops made a filing under Chapter 15 of the U.S. bankruptcy code. Such a filing is typically used by companies based outside the United States to prevent creditors from tying up their U.S. assets.

    Mega Brands is trying to bolster its capital structure, announcing last month a refinancing plan that will shave an estimated $290 million U.S. in debt and about $30 million U.S. in annual interest expenses through new financing and share offerings. Many shareholders are unhappy with the plan because they argue it will dilute the value of existing stock.

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