Idearc's largest shareholder urges board to consider alternatives to bankruptcy

By Caroline Salls

Pittsburgh, March 16 - Idearc, Inc.'s largest shareholder, Jack Corwin, has sent a letter to each member of the company's board of directors urging them to avoid bankruptcy by considering other readily available alternatives, according to a news release.

Corwin said in the release that Idearc has sufficient cash on hand to pay down enough of its outstanding debt to avoid the need for bankruptcy.

The shareholder said the company had $510 million of cash on hand at the end of 2008.

Corwin said the failure to pay down the debt outside of bankruptcy would be a breach of the board's fiduciary duty to shareholders.

According to the release, there is growing speculation that the possible bankruptcy filing is part of a broader plan on the part of the company to decrease its fair market value, and in doing so make it possible for it to capture future appreciation from its currently distressed valuation.

"This comes at a time when all eyes are on corporate America to behave with the utmost fiduciary responsibility," Corwin said in the release.

"Where alternatives may exist for companies to avoid bankruptcy it is highly unusual for a corporation to choose the route of bankruptcy at the risk of damaging their business and harming their employees and other stakeholders."

Corwin said he was "shocked" to read in a press release that the company would likely file for bankruptcy.

Idearc is a Dallas-based provider of yellow and white page directories and related advertising products.

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