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 / Telecommunication Services

Sorenson Communications Disclosure Statement Approved, Plan Confirmed

The U.S. Bankruptcy Court issued an order approving Sorenson Communications’ Disclosure Statement and concurrently confirming its Joint Prepackaged Chapter 11 Plan. According to the documents filed with the Court, “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.”

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