ION Media Networks emerges from bankruptcy under new ownership

By Caroline Salls

Pittsburgh, Dec. 21 - ION Media Networks, Inc. emerged from Chapter 11 bankruptcy on Monday after completing its financial restructuring and receiving all necessary approvals from the Federal Communications Commission for the ownership changes made under its plan of reorganization, according to a company news release.

The company said it was able to eliminate more than $2.7 billion in legacy debt and preferred stock claims.

ION said it emerged from bankruptcy debt-free and with equity growth funding from its owners, which include Avenue Capital, Black Diamond Capital and Trilogy Capital as the three largest holders backing the company's plan.

"Emerging debt-free with $150 million in growth funding will allow us to further build our TV content brands, as well as develop the value of our digital spectrum and technology assets," ION chairman and chief executive officer Brandon Burgess said in the release.

Under the plan:

• The company's debtor-in-possession facility will be converted into 62.5% of the new common stock in the reorganized company;

• Holders of first-lien debt will receive 37.5% of the new common stock;

• The holders of second-priority notes claims will receive a share of a $5 million cash distribution, to be shared with holders of general unsecured claims, and warrants to purchase 5% of the new common stock of reorganized ION at an equity value of $800 million;

• The holders of general unsecured claims will receive a share of the $5 million cash distribution and warrants to purchase 5% of the new common stock at an equity value of $1.1 billion; and

• All outstanding ION equity interests, including common stock, preferred stock and any options, warrants or rights to acquire any equity interests, will be cancelled and holders will not receive a distribution.

ION is a West Palm Beach, Fla.-based television broadcaster. The company filed for bankruptcy on May 19, 2009 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 09-13125.

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