France's Thomson SA has filed for Chapter 15 bankruptcy protection, a companion filing to its French insolvency case, to protect its assets in the U.S. as it tries to reorganize its heavy debt load.
Thomson, based in the Parisian suburb of Issy-les-Moulineaux, provides video production and other services to filmmakers, movie theater operators and cable networks. Its U.S. subsidiary, Thomson Inc., generates about 47 percent of the parent company's revenue.
The American bankruptcy was filed to protect its U.S. assets and keep creditors at bay, which is consistent with the protection the company has in France. Its other case, called a "sauvegarde" in French, is similar to a Chapter 11 case.
On Thursday, U.S. Bankruptcy Judge Burton Lifland of the Southern District of New York granted a provisional stay to protect Thomson's assets from creditors in the U.S. A hearing to recognize its Chapter 15 filing _ which acknowledges the French case as the main case _ was scheduled for Jan. 14.
Thomson CEO Frederic Rose said in a court filing that debt costs became burdensome last year, as it faced detrimental currency fluctuations, restructuring costs and a growing need for cash to fund operations. The company said in court papers it has about $3.77 billion in debt.
Thomson nearly went into default on some loans in April 2009 but secured extensions until July and then again until November, when negotiations with lenders faltered and it entered its court-monitored restructuring in France.
In the French case, Thomson has scheduled a vote for Dec. 21 and 22 so creditors can decide whether to approve its latest reorganization proposal. If it is approved by creditors, shareholders would then vote.
If the company can not get approval for a plan, French monitors can implement one of their own.