Bankruptcy News

We've summarized the latest docket activity and news for publicly traded companies currently operating under U.S. Bankruptcy Court protection.

Bankruptcy/Chapter 11 / Bonds

Sorenson Communications Chapter 11 Petition, Plan Filed

Sorenson Communications and six affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 14-10454. The Company, which provides communications products and services for the deaf and hard-of-hearing, is represented by Laura Davis Jones of Pachulski Stang Ziehl & Jones. The Company announced that it has reached an agreement with a substantial majority of its owners and second lien note holders on the terms of a comprehensive debt restructuring. Sorenson Communications concurrently filed a Joint Prepackaged Chapter 11 Plan and related Disclosure Statement with the Court. The Company is requesting a hearing to approve the Plan and expects the Chapter 11 process to conclude within 60 days. “The industry is forced to make changes as a result of the evolving regulatory landscape. Despite these regulatory challenges, Sorenson remains committed to continue to enable deaf and hard-of-hearing people to access functionally-equivalent telephone services,” comments Scott Sorensen, chief financial officer of Sorenson Communications. According to the Disclosure Statement, “The Plan provides, among other things, that the Debtors will: (a) enter into the Exit Facility, consisting of a $550 million first lien term loan, which will be backstopped by certain holders of Secured Notes or their affiliates and, potentially, a $25 million first lien revolving credit facility; (b) repay in full the existing First Lien Credit Facility; (c) exchange existing Secured Notes for a combination of two series of new notes, new equity, and cash; and (d) exchange existing equity for a combination of new notes and new equity. The current holders of Secured Notes will own 87% of the reorganized ultimate parent company. Holders of First Lien Credit Facility Claims are unimpaired under the Plan, as are general unsecured creditors - that is, such holders will be paid in full. The restructuring contemplated by the Plan will improve the Debtors’ ability to service their indebtedness and will permit the Debtors to pay down their indebtedness on an extended time frame, as the new first and second lien debt issued under the Plan will mature in 2020 and 2021, respectively. This financial restructuring will also afford the Debtors the runway they need to adjust their businesses to address the regulatory changes that have reshaped their industry and engage in discussions with the FCC regarding stabilizing the industry.”

Read more Bankruptcy News