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Cengage creditors want halt to debtors' prepetition Apax investigation
By Jim Witters
Wilmington, Del., July 26 - Cengage Learning, Inc.'s official committee of unsecured creditors wants the court to terminate or suspend the debtors' prepetition investigation into "certain conduct" of Apax Partners, LP and its affiliates, according to a July 26 filing with the U.S. Bankruptcy Court for the Eastern District of New York.
The committee says it does not want its fiduciary responsibility to conduct an independent investigation to be "usurped, impaired or impeded" by continuation of the debtors' inquiry.
The investigation related to the purchase by Apax of more than $1 billion in debt instruments of the debtors.
Cengage has been slow about sharing information with the creditors committee about its investigation, the motion states. And the committee "is concerned" that the debtor's investigation "is being orchestrated ... in an effort to preempt and/or ultimately preclude the committee from conducting its own diligence."
"Questions remain whether the narrow scope of the prepetition investigation should be subsumed into a larger inquiry of issues related to Apax and whether the prepetition investigation in isolation may impair or impede other investigations or claims. What is clear is that the committee, or an examiner if one is requested, will have a duty to investigate these issues as part of a more comprehensive investigation and thus, there is no need to waste estate assets on the prepetition investigation or allow actions that adversely impact an independent investigation," the committee says.
No hearing on the motion has been scheduled.
Cengage, a Stamford, Conn.-based provider of teaching, learning and research services for the academic, professional and library markets, filed for bankruptcy on July 2. The Chapter 11 case number is 13-44106.
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