Print Page 10/6/2009

NEW YORK: The disclosure statement proffered by ION Media Networks on its proposed reorganization has received the court’s blessing. ION said the United States Bankruptcy Court for the Southern District of New York approved its statement and authorized the media company to start soliciting votes from creditors. The court will consider approval of ION’s reorganization plan at a hearing scheduled for Nov. 3.

The plan is supported by lenders holding more than 70 percent of ION’s first-lien secured debt, who provided the company’s debtor-in-possession funding of $150 million. It has also been approved by the statutory committee of unsecured creditors. ION, the lenders and the committee recently reached a settlement that’s now incorporated in the reorg plan..

The plan eliminates $2.7 billion in legacy debt and preferred stock claims. It also converts the $150 million DIP financing into 62.5 percent of the new common stock in the reorganized company. Holders of first-lien secured debt will receive their pro rata share of the remaining 37.5 percent of common stock.

Holders of second-priority and general unsecured claims will share $5 million in cash to buy 5 percent of the new common stock.
 
“All outstanding ION equity interests, including common stock, preferred stock and any options, warrants or rights to acquire any equity interests, will be cancelled and extinguished and holders thereof will not receive a distribution,” ION said.

The broadcast group said it would commence soliciting votes on the plan “shortly.” It is expected to emerge from bankruptcy later this year.

ION filed for bankruptcy in May, listing assets of around $10 million and liabilities of more than $1 billion.

More on ION:
July 6, 2009: “Court Approves DIP Financing for ION Media”
ION Media said it received final approval for its $150 million debtor-in-possession financing plan. The United States Bankruptcy Court for the Southern District of New York gave its blessing last week just as some creditors objected to the terms of the DIP.

July 2, 2009: “ION Media’s Creditors Object to DIP Terms”
ION Media’s creditors are objecting to the terms of the company’s $150 million debtor-in-possession loan. ION in turn told the U.S. District Court for the Southern District of New York on Wednesday that the loan facility was “fair and reasonable.”

May 21, 2009: “ION Files for Bankruptcy”
ION Media Networks has filed for Chapter 11 in U.S. Bankruptcy Court for the Southern District of New York, listing assets of around $10 million and liabilities of more than $1 billion. A total of 117 subsidiaries also filed.

June 29, 2009: “ION Mobilizes TV in Manhattan and D.C.”
The service marks the for-real commercial debut of mobile digital TV broadcasting in the United States, though for whom is unclear. Various prototype receivers were bandied at April’s NAB trade show, but none appear to be readily available.    Print Page