Ziff Davis Media exits Chapter 11 bankruptcy

By Caroline Salls

Pittsburgh, July 15 - Ziff Davis Media Inc. emerged from Chapter 11 bankruptcy after its plan of reorganization took effect on July 1, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The plan was confirmed by June 17.

Under the plan, Ziff Davis, publisher of PC Magazine and other technology and videogame-oriented media, will issue a new $57.5 million senior secured note in exchange for the company's existing senior secured debt, plus stock.

In addition, 11.2% of the reorganized company's common stock will be distributed to holders of Ziff Davis' subordinated unsecured notes.

As previously reported, the company secured $7.5 million of exit financing.

Creditor treatment

Treatment of creditors under the plan will include:

• Holders of administrative claims, less than $20,000 in miscellaneous priority claims and $100,000 in priority tax claims will recover 100% in cash;

• Holders of less than $100,000 in miscellaneous secured claims will recover 100% either in cash, reinstatement of their claims or return of the collateral securing the claims;

• Holders of subsidiary interests will retain their interests;

• Holders of $242.55 million in senior secured note claims will receive their share of new senior secured notes, their share of cash, 90% of the new common stock of the reorganized company and their share of an indemnity escrow;

• Holders of $186.39 million in subordinated note claims will receive 10% of the new common stock of the reorganized company and warrants for an additional 5% of common stock.

• Holders of $14 million in general unsecured claims will recover 9% through their share of $1.25 million in cash;

• Holders of $915,000 in convenience claims of $10,000 or less will recover 50% in cash; and

• Holders of old Ziff Davis Holdings common stock and interest will receive no distribution under the plan.

Ziff Davis is a New York-based media company with about 250 employees. It filed for bankruptcy on March 5, and its Chapter 11 case number is 08-10768.

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