Dolan plan of reorganization confirmation hearing postponed to May 27

By Caroline Salls

Pittsburgh, April 29 - The Dolan Co.'s plan of reorganization confirmation hearing has been adjourned to May 27, according to an agenda filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

The hearing was previously scheduled for May 1. The agenda did not give a reason for the adjournment.

Last week, the U.S. Trustee for Dolan's Chapter 11 case and the official committee of equity security holders appointed for the case objected to confirmation of the company's plan.

Region 3 U.S. trustee Roberta A. DeAngelis said in her plan objection that "the plan is contrary to the notion of a pre-packaged plan because it entirely eliminates prepetition equity notwithstanding the existence of substantial prepetition evidence in the debtors' most recent public filings and in the debtors' judicial admissions contained in the petition that there is substantial equity in the debtor."

DeAngelis said the disclosure statement for the plan fails to address the loss of more than $50 million of shareholder equity from the bankruptcy filing date to the plan effective date.

Meanwhile, the committee said the plan is premised on a total enterprise valuation analysis designed to support the Dolan debtors' determination that equity is not entitled to any recovery.

The committee said it began talks with Dolan and Bayside to obtain an adjournment of the confirmation hearing and in the meantime asked the court to adjourn the hearing and related deadlines or delay approval of the plan and disclosure statement.

On April 24, the company asked the court to disband the equity committee, arguing that the committee appointment was "wholly unwarranted in these Chapter 11 cases, given the hopeless insolvency of the debtors' estates." Dolan said there is "no realistic avenue for a distribution to equity interest holders in these Chapter 11 cases."

The company said the U.S. Trustee chose to form an equity committee primarily because the Dolan debtors' financial filings, including their most recent 10-Q, 10-K and bankruptcy petition exhibits, indicated a positive book value for equityholders.

Dolan said public financial filings like those are generally based on historical performance and reflect historical cost for assets; "they do not reflect fair market value."

Dolan, a business information and professional services company based in Minneapolis, filed bankruptcy on March 23. The Chapter 11 case number is 14-10614.

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