Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Dex Media Inc. files for Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Date: July 7, 2016
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Recently, phonebook publisher Dex Media Inc. announced that it had filed for Chapter 11 bankruptcy protection, according to The Wall Street Journal. The company has negotiated an agreement to restructure its finances with creditors.
Dex Media’s struggles forces it into insolvency
Following the recession in 2008, along with the continued migration of the industry to the Internet, Dex Media found its print advertising revenue had significantly declined in recent years. Bankrupt Company News reported that since this revenue was its primary source of cash flow, the company’s liquidity became severely strained.
The company becomes just the most recent major phonebook publisher to seek Chapter 11 bankruptcy protection since 2009. To date, five other phonebook companies have filed bankruptcy petitions as more and more advertising dollars move to the Internet.
In its bankruptcy documents, the company listed assets of only $1.27 billion with a debt load of more than $2.65 billion.
Dex Media’s reorganization plan
Dex Media has reached a restructuring agreement with approximately 66 percent of its secured lenders and bondholders. Prior to the deal, 96 percent of its senior secured lenders approved the reorganization plan, which is set to go into effect in the third quarter of this year.
Under the agreement, the company’s senior secured creditors will receive $2.12 billion in claims in exchange for a $600 million first-lien term loan, according to USA Today. These lenders and bondholders will also receive 100 percent equity in the restructured company. Furthermore, unsecured creditors will receive $5 million in cash as well as warrants worth up to 10 percent of the newly reorganized company. With its debt-for-equity swap, the company stated that it intends to emerge from the bankruptcy period as a viable business.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
- Practices: Bankruptcy & Creditors' Rights
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
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