Barclays Bank is asking a New Jersey bankruptcy judge to dismiss a suit challenging liens against Multi-Color Corp., saying the suit is unnecessary since the bankrupt global label-maker's reorganization plan will be before the court by the end of the month.

Barclays on Monday asked U.S. Bankruptcy Judge Michael B. Kaplan to stay or dismiss the challenge, saying the lien and valuation issues it raises will be resolved in the Chapter 11 plan confirmation process and that the challenging parties are only trying to delay the case.

"This tactic is not new, but it needlessly depletes estate funds and jeopardizes the debtors' reorganization," the bank said.

Atlanta-based Multi-Color and affiliates hit Chapter 11 in January with an agreement to trim $3.9 billion of the company's $5.9 billion in debt.

Last month, a group of cross-holders of unsecured Multi-Color notes filed an adversary action against Barclays, the agent for the secured debt holders, seeking a declaration that the bank holds liens only on some assets, as stated previously in the Chapter 11 case.

In its motion, Barclays argued that a hearing on Multi-Color's Chapter 11 plan is scheduled for no later than March 31, and will necessarily involve discovery and a ruling on the validity of the liens and the value of the collateral.

The bank argued that the cross-holder group was pursuing the suit to delay the confirmation process "for the sole purpose of extracting value for the [cross-holder ad hoc group's] substantially underwater debt positions."

At a hearing before Judge Kaplan on Tuesday, counsel for an ad hoc group of secured lenders, who were seeking to intervene in the adversary action, made similar arguments.

"It will be resolved before we even get to the first or second step of the lawsuit," secured noteholder counsel Alexander Lees said.

The motions to intervene by the secured noteholder group and an affiliate of private equity firm Clayton Dubilier & Rice were opposed by the cross-holder group, which argued that the affiliate and noteholder group had not filed a pleading explaining their arguments and which side they were taking in the case as required by federal rules of procedure.

"The rule says 'must.' This language is not discretionary," cross-holder counsel Andrew Butler said.

Lees said this argument elevates "form over substance."

"It's no secret we're going to defend the liens," he said.

Judge Kaplan granted the lenders permission to intervene, on the condition they file their own pleading or a joinder to the dismissal motion within 14 days.

Barclays is represented by Alan J. Brody of Greenberg Traurig LLP, and Joel Moss, David G. Januszewski, Jordan Wishnew and Jason M. Hall of Cahill Gordon & Reindel LLP.

The cross-holder ad hoc group is represented by Paul R. DeFilippo, James N. Lawlor and Joseph F. Pacelli of Wollmuth Maher & Deutsch LLP, and Bruce Bennett, Benjamin Rosenblum, Genna L. Ghaul, Andrew Butler and Benjamin C. Sandberg of Jones Day.

The secured ad hoc group is represented by Thomas M. Walsh, Matthew E. Beck and Sam Della Fera Jr. of Chiesa Shahinian & Giantomasi PC, and Evan R. Fleck, Matthew Brod, Alexander Lees, Justin Cunningham, Melanie Westover Yanez and Hannah A. Blazek of Milbank LLP.

The Clayton Dubilier affiliate is represented by Jeffrey Cohen, Eric S. Chafetz, Colleen M. Restel and Philip Gross of Lowenstein Sandler LLP, Erica Weisgerber, Zach Saltzman, Nick S. Kaluk III and Mitchell Carlson of Debevoise & Plimpton LLP, and Ray C. Schrock, Candace M. Arthur, Ryan Preston Dahl and Deniz Irgi of Latham & Watkins LLP.

The adversary action is BTG Pactual Asset Management US LLC et al. v. Barclays Bank PLC, case number 3:26-ap-1041, and the bankruptcy is In re: Multi-Color Corp., case number 3:26-bk-10910, both in the U.S. Bankruptcy Court for the District of New Jersey.