Dimac Reaches Agreement With Major Creditors on Reorganization Plan

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Dimac Corp., a direct response marketing solutions company, has reached an agreement with all its major creditors on its restructuring plan, the firm said yesterday.

The agreement sets "the stage for our company to emerge from Chapter 11," said Robert "Kam" Kamerschen, chairman/CEO of Dimac, St. Louis.

Dimac and its subsidiaries filed voluntary petitions for bankruptcy protection under Chapter 11 in April in an effort to improve its overall profitability and cash flow. Since then, Dimac has undertaken an operational and balance sheet restructuring, including the hiring of key individuals to lead its businesses, consolidating operations, and improving profitability and its long-term growth prospects.

In October, Dimac filed its disclosure statement and plan of reorganization with U.S. Bankruptcy Court in Wilmington, DE.

The official unsecured creditors' committee and Dimac will request court approval of this agreement at the confirmation hearing on its reorganization plan Dec. 19 before U.S. Bankruptcy Court in Wilmington.

On the date the company's reorganization plan becomes effective, McCown De Leeuw & Co., the controlling stockholder of Dimac Holdings, will allow the banks to distribute 30 percent of the new common stock as defined in the plan. The banks will also distribute 20 percent of the Series B preferred stock as defined in the plan and 10 percent of the new common stock to TCW/Crescent Mezzanine Partners L.P. or its nominee.

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