Investors sued Boardriders Inc., the company behind the Quiksilver and Billabong brands, over a $431 million rescue financing package they said elevated the interests of a select group of lenders and private-equity backer Oaktree Capital Management LP, WSJ Pro Bankruptcy reported. Intermediate Capital Group PLC, York Capital Management and other lenders filed a lawsuit in the Supreme Court of New York on Friday, challenging an August financing deal that supplied the surfwear-inspired apparel company with $110 million in fresh capital from a group of lenders. In return for the infusion, Boardriders gave those parties top-ranking collateral rights on $321 million of loans they already held, pushing other lenders that didn’t participate down in the payment line, according to the complaint. The lenders that filed the suit are seeking a judgment invalidating and unwinding the transaction.
