|By Business Wire||
|June 9, 2014 05:53 PM EDT||
The Dolan Company (OTC:DOLNQ) and its subsidiaries (collectively, the “Company”) announced today that the United States Bankruptcy Court for the District of Delaware (the “Court”) has confirmed their prepackaged chapter 11 plan of reorganization. Confirmation of the plan of reorganization is a critical step toward the Company’s emergence from bankruptcy, which the Company anticipates will occur later this week.
Under the plan of reorganization, the Company’s secured lenders will become the owner of The Dolan Company and The Dolan Company’s e-discovery business, DiscoverReady LLC, each of which will be operated as separate and distinct entities. Investment funds managed by Bayside Capital, Inc. will be the majority owner. Bayside Capital is an affiliate of H.I.G. Capital, a leading global private investment firm with more than $15 billion of equity capital under management. Upon emergence from bankruptcy, the Company’s preferred and common stock will be cancelled.
The confirmed plan of reorganization will allow the filing subsidiaries of the Company to deleverage their capital structure by reducing their projected secured debt obligations by over $100 million to approximately $50 million. In transactions related to the plan, the Company’s secured lenders will refinance DiscoverReady’s capital structure with a $10 million unfunded secured revolving facility. Importantly, the Company will continue to provide its usual, high-quality services and products to its customers and to pay trade creditors in the ordinary course of business.
Emergence from bankruptcy will represent the culmination of a comprehensive balance-sheet restructuring with the Company’s secured lenders that, among other things, significantly improves the Company’s capital structure and establishes DiscoverReady as a separate and independently managed operating company.
“Confirmation of the plan is a key step in unlocking the Company’s businesses from the weight of debt associated with the Company’s former mortgage foreclosure processing businesses,” said Kevin Nystrom, the Company’s chief restructuring officer. “Emergence from bankruptcy, which we expect to occur later this week, will be the capstone of the Company’s efforts to secure a bright future for the Company and its customers, employees, and vendors,” he said.
In connection with confirmation of the plan of reorganization, the Court approved a settlement between the Company and the Official Committee of Equity Security Holders appointed in the Company’s chapter 11 cases. Pursuant to the settlement, the Company will transfer approximately $3.2 million comprised of cash and a note receivable to a trust established for the benefit of holders of the Company’s preferred and common stock. Approximately 20 percent of the proceeds of the trust will subsequently be distributed pro rata to holders of the Company’s preferred stock; the balance will be distributed pro rata to holders of the Company’s common stock.
The Dolan Company is a leading provider of professional services and business information to the legal, financial, and real estate sectors. The Company’s Professional Services Division provides specialized outsourced services to the legal profession primarily through subsidiaries DiscoverReady LLC and Counsel Press. Counsel Press is the nation’s largest provider of appellate services to the legal community. DiscoverReady LLC provides outsourced discovery management and document review services to major companies and law firms. The Company’s Business Information Division publishes business journals, court and commercial media, and other highly focused information products and services, operates web sites, and produces events for targeted legal and professional audiences in each of the 19 geographic markets that it serves across the United States.
Statement Regarding Forward Looking Information
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical or current facts are forward-looking statements. Such forward-looking statements include statements using words such as “anticipate,” “expect,” “believe,” “continue,” “will,” “may,” “estimate,” “assume,” “presume,” “pursue,” “outlook,” “plan,” “goal,” “milestone” and similar expressions. Forward-looking statements are subject to risks, uncertainties and other factors that could cause the actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: our ability to fund our ongoing operations, repay our indebtedness, fund capital expenditures, make acquisitions and divestitures on acceptable terms; our ability to retain key customers and develop new customer relationships in our litigation support services segment; our ability to retain key personnel; the adverse resolution of a future lawsuit or claim against us; the failure or disruption of our software systems, our document hosting, processing, conversion and review systems, or our website and online networks; the risk that our customers fail to timely pay us for our services, or at all; and the other risk factors described under “Risk Factors” in Item 1A of our annual report on Form 10-K for the year ended December 31, 2012, which we filed with the SEC on March 8, 2013, and those highlighted in our Form 10-Q for the quarter ended September 30, 2013, which we filed with the SEC on November 12, 2013. We undertake no obligation to update any forward-looking statements in light of new information or future events.
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