Sorenson Communications cash use and trading restrictions approved

By Caroline Salls

Pittsburgh, March 26 - Sorenson Communications, Inc. received final court approval to use the cash collateral of its pre-bankruptcy lenders to fund its operations while in bankruptcy and final approval of the notification and hearing procedures for trading its equity securities, according to Wednesday filings with the U.S. Bankruptcy Court for the District of Delaware.

The cash collateral use will expire in 75 days from the bankruptcy filing date, or earlier upon the closing of an asset sale, the plan of reorganization effective date and other termination events specified in the agreement.

Under the trading procedures, a substantial equityholder may not complete a purchase, sale or other transfer of the securities that does not comply with the notification and hearing procedures. Any transfer that does not comply with the procedures will be considered null and void.

Specifically, any holder of 4.53 million, or 4½%, of the securities must give notification at least 14 days before a proposed transfer.

If Sorenson or its noteholders object to the transfer, it cannot be made without a final, non-appealable court order.

In addition, any substantial equityholder must notify the court and other parties of that status within two weeks of the order or five days after becoming a substantial holder.

Sorenson also received court approval to employ AlixPartners, LLP as its restructuring adviser, retroactive to March 3.

Sorenson selected AlixPartners based on the firm having "assisted and advised, and provided strategic advice to, debtors, creditors, bondholders, investors, and other entities in numerous Chapter 11 cases of a similar size and complexity to these Chapter 11 cases," the motion stated.

AlixPartners will assist the debtors to improve coordination of the restructuring process and also assist in information gathering, report preparation, and preparation of court testimony.

Sorenson, a Salt Lake City-based provider of Video Relay telecommunication, interpreting and CaptionCall telephone service for the deaf and hard-of-hearing, filed for bankruptcy on March 3. The Chapter 11 case number is 14-10454.

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