Idearc creditor groups agree to resolve lawsuits, plan objections

By Caroline Salls

Pittsburgh, Nov. 20 - Idearc Inc. and its major creditor groups requested court approval of an agreement resolving all pending litigation among the parties and all objections to confirmation of the company's plan of reorganization, according to a company news release.

Idearc said it is on schedule to emerge from Chapter 11 bankruptcy at or near the end of the year.

A hearing on approval of the settlement and confirmation of the company's plan of reorganization will be held Dec. 9 to Dec. 11.

"We are very pleased to have reached agreement with the committee representing [Idearc's] unsecured creditors, the agent bank and steering committee representing secured lenders and our largest bondholder, MatlinPatterson, regarding all major objections to our plan," chief executive officer Scott W. Klein said in the release.

"This is an important milestone in our overall path to emergence."

As previously reported, the U.S. Bankruptcy Court for the Northern District of Texas approved the company's standby purchase agreement on Wednesday. Under that agreement, creditors who will be receiving new common stock of reorganized Idearc upon its emergence from bankruptcy may elect to receive cash in lieu of all or a portion of the stock.

The cash to fund the elections will be provided by Paulson's purchase from reorganized Idearc of the number of shares of new common stock that otherwise would have been distributed to electing claimholders.

Under its proposed plan of reorganization, the company said its total debt will be reduced to $2.75 billion of secured bank debt from roughly $9 billion of debt.

Idearc, a Dallas-based provider of yellow and white page directories and related advertising products, filed for bankruptcy on March 31, 2009. Its Chapter 11 case number is 09-31828.

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