Dex Media filed a prepackaged plan of reorganization along with voluntary petitions, under Chapter 11 in the U. S. Bankruptcy Court for the District of Delaware. The company expects, among other things, to receive court authority to pay employee wages, offer benefits and continue to pay trade creditors and suppliers in the ordinary course of business.
The filing follows the completion of the solicitation process of the company’s senior secured lenders, which resulted in more than 96% of the company’s senior secured lenders voting in favor of the plan. The company expects to complete the restructuring during the third quarter 2016.
The company’s various pleadings request court approval for payments to Dex Media’s employees, vendors and other unsecured creditors to continue in the ordinary course with no disruption. The company did not obtain DIP financing as it maintains substantial cash balances and continues to generate positive cash flow to fund its ongoing operations.
Additional material terms of the plan include:
- Dex Media’s senior secured lenders will exchange their current $2.12 billion of claims for a new $600 million new first-lien term loan; 100% of the equity of the reorganized Dex Media, subject to potential dilution from a management incentive plan; and a cash distribution upon emergence from bankruptcy.
- The company’s unsecured noteholders will receive a $5 million cash payment and warrants to purchase up to 10% of the post-reorganized equity.
- All allowed trade vendor claims will be paid in full.
Dex Media’s legal advisor in connection with the restructuring is Kirkland & Ellis. Alvarez & Marsal North America serves as its restructuring advisor and Andrew Hede from Alvarez & Marsal serves as chief restructuring officer. JPMorgan Chase Bank and Deutsche Bank Trust Company Americas, as agents under the senior secured credit agreements, are represented by Simpson Thacher & Bartlett as legal advisor to the agents.