Dolan emerges from Chapter 11 bankruptcy case under lender ownership

By Caroline Salls

Pittsburgh, June 12 – The Dolan Co. and its subsidiaries emerged from their 81-day Chapter 11 bankruptcy case on Thursday, according to a company news release.

As previously reported, Dolan’s plan of reorganization was confirmed by the U.S. Bankruptcy Court for the District of Delaware on June 9.

Under the plan, the company is now owned by its secured lenders. Investment funds managed by Bayside Capital, Inc. are the majority owner.

With its emergence, Dolan said it completed a comprehensive balance-sheet restructuring with the secured lenders, which significantly improves the company’s capital structure.

The restructuring also establishes DiscoverReady LLC, Dolan’s former e-discovery business, as a separate and independently managed operating company, the release said. DiscoverReady is also majority owned by investment funds managed by Bayside Capital, Inc.

Holders of pre-bankruptcy credit agreement claims will receive their share of 100% of the equity in the reorganized Dolan debtors, 100% of the equity in a special purpose vehicle established to make distributions of the proceeds from some notes receivables and an up to $50 million take-back term loan that will be part of the debtors’ exit facilities.

In transactions related to the plan, the company said its secured lenders will refinance DiscoverReady LLC’s capital structure with a $10 million unfunded secured revolving facility.

In connection with the plan, the court approved a settlement between the company and its official committee of equity security holders under which Dolan will transfer $3.2 million in cash and a note receivable to a trust established for the benefit of holders of its preferred and common stock.

About 20% of the proceeds of the trust subsequently will be distributed to preferred stock as of June 12, and the balance will be distributed to common stockholders as of June 12.

The company’s old preferred and common stock has been cancelled.

Holders of general unsecured claims will be paid in full in cash.

Dolan, a business information and professional services company based in Minneapolis, filed bankruptcy on March 23. The Chapter 11 case number is 14-10614.

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