Ziff Davis Media files Chap. 11

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Integrated media company Ziff Davis Media Inc. has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of New York as it attempts to implement a restructuring program.

Ziff Davis expects operations to continue as usual during the reorganization process and to emerge from Chapter 11 this summer with an improved capital structure.

“Today's restructuring agreement goes a long way towards resolving the burdens of a debt load and capital structure established seven years ago, during a leveraged buyout of the company,” said Jason Young, CEO of Ziff Davis Media, in a statement.

As part of the restructuring, the ad hoc note holder group has agreed to set aside up to $24.5 million to fund the company's operations during the Chapter 11 process and after the company emerges from Chapter 11.

The reorganization calls for $225 million of senior secured indebtedness to be exchanged for a new $57.5 million senior secured note and at least 88.8% of the common stock in the reorganized company. The restructuring provides for 11.2% of the reorganized company's common stock to be distributed to holders of the company's subordinated unsecured notes if the class of such holders votes to accept the restructuring. Holders of the company's subordinated, unsecured notes have not yet agreed on the restructuring. However, the company believes the restructuring plan can be approved by the court without their agreement.


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