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

Dex Media Chapter 11 Petition, Plan Filed

Dex Media (f/k/a R.H. Donnelley) and 12 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 16-11200. The Company, which provides marketing solutions, is represented by Pauline K. Morgan of Young Conaway Stargatt & Taylor. Concurrent with its Chapter 11 petition, the Company also filed with the Court a Joint Prepackaged Plan of Reorganization and related Disclosure Statement. The Disclosure Statement explains, "The economic recession that began in 2008 and the accompanying dislocation of credit markets triggered a decline in the Debtors' print advertising sales--the principal source of the Debtors' revenue. The Debtors experienced declines in advertising sales due to the economic recession, dislocation of credit markets, declining consumer usage of print directory products, and significant competition and saturation in advertising markets, which placed significant strain on the Debtors' liquidity…..The Debtors ultimately reached an agreement with parties holding approximately 69 percent in aggregate of claims under the Credit Agreements (the "Supporting Lenders") and approximately 80 percent of claims under the Subordinated Notes…for a consensual balance sheet restructuring transaction that would also address the Debtors' overly complicated organizational structure in a tax-efficient manner. Notably, the restructuring provides a meaningful recovery to general unsecured stakeholders….Holders of Claims under the Debtors' Subordinated Notes will receive, from proceeds of the collateral of the Term Loan Lenders…their Pro Rata share of (a) $5 million in Cash, and (b) the Warrants." The Disclosure Statement further explains, "Holders of General Unsecured Claims will receive, from proceeds of the collateral of the Term Loan Lenders, as authorized by and consented to by the acceptance of the Plan by the Holders of Credit Agreement Claims, payment in full on the later to occur of the Effective Date of the Plan or in the ordinary course of business….While the Debtors have put together an effective go forward business plan, their present debt load is simply too large given industry challenges. The Debtors worked diligently with their advisors and the Supporting Lenders to develop a business plan, simplify their corporate structure, and properly size a manageable debt capacity going-forward--the result of this process was a Plan that will right-size the Debtors' balance sheet, position them for long-term success, and ensure that the Debtors do not return to bankruptcy." Dex Media emerged from previous Chapter 11 filings in April 2013 and January 2010.

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