ION Media disclosure statement approved; plan hearing set for Nov. 3

By Caroline Salls

Pittsburgh, Oct. 1 - ION Media Networks, Inc.'s disclosure statement has been approved by the U.S. Bankruptcy Court for the Southern District of New York, according to a company news release.

The plan of reorganization confirmation hearing is scheduled for Nov. 3.

According to the release, the plan has the support of holders of more than 70% of ION's first-lien secured debt, who also served as the source of ION's $150 million debtor-in-possession facility, as well as the company's official committee of unsecured creditors.

As previously reported, the plan calls for a complete extinguishment of more than $2.7 billion in legacy debt and preferred stock claims.

Under the plan:

• The company's DIP facility will be converted into 62.5% of the new common stock of reorganized ION;

• The holders of first-lien secured debt claims will receive their share of 37.5% of the new common stock;

• The holders of second-priority notes claims will receive a share of a $5 million cash distribution, to be shared with holders of general unsecured claims, and warrants to purchase 5% of the new common stock of reorganized ION at an equity value of $800 million;

• The holders of general unsecured claims will receive a share of the $5 million cash distribution and warrants to purchase 5% of the new common stock at an equity value of $1.1 billion; and

• All outstanding ION equity interests, including common stock, preferred stock and any options, warrants or rights to acquire any equity interests, will be cancelled and holders will not receive a distribution.

In addition, ION said it has received Federal Communications Commission approval of its short-form application for transfer of control of its television licensees, allowing the company to emerge from the bankruptcy process upon court approval of its plan of reorganization.

The company said it will begin soliciting votes on the plan shortly and it expects to emerge from bankruptcy later this year.

ION is a West Palm Beach, Fla.-based television broadcaster. The company filed for bankruptcy on May 19 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 09-13125.

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