Idearc wins bankruptcy court approval of plan of reorganization

By Caroline Salls

Pittsburgh, Dec. 22 - Idearc, Inc.'s first amended plan of reorganization was confirmed Tuesday by the U.S. Bankruptcy Court for the Northern District of Texas.

As previously reported, the company's debt will be reduced to $2.75 billion of secured bank debt from $9 billion of total debt, with Idearc's current bank debtholders, bondholders and some other creditors receiving new common stock of reorganized Idearc or, if they choose, cash.

Current equity holders will receive no distribution as part of the reorganization.

Specific creditor treatment will include:

• Holders of administrative claims, priority tax claims, secured tax claims and other priority claims will be paid in full in cash;

• Holders of other secured claims will either have their claims reinstated or rendered unimpaired;

• Holders of secured credit facility claims will receive a share of distributable cash, $2.75 billion in new term loans and 85% of the new common stock in the reorganized company. If these creditors elect to receive cash instead of some or all of their claims, their stock will be distributed to standby purchasers;

• Holders of unsecured note claims and general unsecured claims will receive a share of $120 million in cash and a share of 15% of the new common stock in the reorganized company, provided that if these creditors elect to receive cash instead of any portion of their stock, that stock will be distributed to the standby purchasers.

These credits will also receive the first $30 million of any litigation proceeds, with any proceeds in excess of $30 million to be shared by holders of unsecured credit facility claims, unsecured note claims and general unsecured claims;

• Holders of convenience claims will recover 25% in cash, up to $2,500, provided, however, that distributions to holders of convenience claims will be limited to $2.4 million; and

• Holders of subordinated claims and Idearc interests will receive no distributions.

According to a Tuesday court filing, the Spencer informal equity committee has appealed the plan confirmation order.

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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