Judge Defers Ruling on Multi-Color Chapter 11 Loan ‘Roll-Up’

A federal judge said he would let label-maker Multi-Color Corp. draw the rest of its $250 million Chapter 11 loan, but stopped short of approving a contested feature of the financing that would push some existing debt to the top of the repayment line.

US Bankruptcy Judge Michael Kaplan said Thursday he was prepared to grant final approval for the debtor-in-possession loan, which would unlock another $125 million after the court authorized an initial draw last month. However, he said he wasn’t ready to sign-off on a provision in the deal that rolls-up a total of $250 million of existing debt in exchange for the new money, an aspect of the financing opposed by rival lenders.