Since May, Vertis and American Color Graphics Inc. have sent out press releases detailing their plans to merge through twin bankruptcy filings.
Through these company statements, we also already know that they have arranged prepackaged plans of reorganization, which will give their various classes of noteholders $550 million in new notes and all of the equity in the combined reorganized company. We also know, thanks to a second release in May, that vast majorities of the noteholders -- up from the support initially announced -- have agreed to the debt-for-equity swap. And that the companies, having locked up even more support, on June 11 began soliciting votes on the reorganization plans from noteholders.
Now we know that Vertis has received a $380 million debtor-in-possession financing and $650 million exit financing, both largely from GE Commercial Finance. (Morgan Stanley Senior Funding Inc. will arrange $400 million of the exit facility, according to the Thursday announcement.)
The Vertis case has been the opposite of cases such as Linens 'n Things Inc. and Steve & Barry's LLC, where the companies stayed mum until their filings came, but rumors flew in the press about when the retailers would file and what they would do afterward. All that remains for Vertis is to follow suit with its own filing, which could come in the next week, given the announced timelines. Another statement would surely accompany the bankruptcy petitions. - Jamie Mason
