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Home > BizTimes Daily > Archives > August 5, 2009
Cygnus Business Media files for pre-packaged bankruptcy
Published August 5, 2009 - BizTimes Daily
Cygnus Business Media, Inc., a Fort Atkinson-based diversified business-to-business media company, announced it has reached agreement with 23 of its 24 secured lenders on a financial restructuring that will result in a secured debt-equity exchange to reduce the company's secured debt.
Following the restructuring, Cygnus Business Media will have a serviceable debt level and a stronger balance sheet. The restructuring will provide for payment in full of all unsecured trade debt.
The restructuring will be enacted through Chapter 11 of the U.S. Bankruptcy Code. Petitions were filed Monday by the company, its parent company and its subsidiaries with the U.S. Bankruptcy Court for the District of Delaware in Wilmington. Concurrently, the company filed its pre-packaged Plan of Reorganization and Disclosure Statement, which sets forth how the secured debt will be restructured and provides for unsecured creditor claims to be satisfied in full. Both of these documents are subject to approval by the Bankruptcy Court, which approval the company expects to obtain in the next 45 days.
The pre-packaged Plan of Reorganization received the overwhelming support of the company's secured lenders. The company believes its prior preparation will allow for an accelerated pace for the Chapter 11 restructuring, which could require approximately 45 days to complete. During that time, Cygnus Business Media will operate as usual, and it does not expect there to be any impact on its day-to-day operations.
"Our business sectors show positive contribution because our brands are narrowly focused on the specific needs of thousands of advertisers, exhibitors, marketers, subscribers and online visitors," said Charles Carnaval, chief executive officer of Cygnus Business Media. "During the next month or so, while we complete the legal process, our business will continue without interruption to meet the needs of the customers in our vertical markets. We have sufficient funds to support our working capital needs. In addition, our Court pleadings call for full support to customers and critical vendors and our Plan of Reorganization reflects the confidence of our senior lenders in Cygnus Business Media's operating future."
