Mood Media expects to make pre-packaged Chapter 11 filing by July 30

By Caroline Salls

Pittsburgh, June 26 – Mood Media entered into a restructuring support agreement with some of its lenders, noteholders and equity sponsors on the terms of a pre-packaged financial restructuring plan that will reduce the company’s debt by $404 million, providing financial flexibility and positioning the company for long-term success, according to a news release.

Currently, more than 90% of the company’s first-lien term loan lenders, more than 70% of its second-lien PIK noteholders and more than 60% of its equity sponsors have signed on to the support agreement.

To implement the agreement, Mood Media said it is initiating a process to solicit approval of a pre-packaged restructuring plan from its lenders and noteholders.

The company said it expects to file Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas no later than July 30.

Mood Media’s international subsidiaries will not be part of the Chapter 11 filing.

The company said it will continue operating throughout the court-supervised process.

“We recognize this is a unique and unprecedented time for our team members, our clients and our company,” chief executive officer David Hoodis said in the release.

“Like many others, we have taken difficult but necessary steps to protect our business and preserve liquidity. We are now taking action to provide a clear and expedited path to strengthen our financial position, address our debt levels and enable us to be an even better partner to our clients.”

In connection with the expected court-supervised process, the company said it has received a commitment for up to $240 million in new financing, including $40 million of new capital, from HPS Investment Partners, LLC and other first-lien term loan lenders.

The new financing will be subject to court approval and, together with cash generated from the company’s ongoing operations, is expected to provide ample liquidity for Moody Media to continue operating in the ordinary course during and after the contemplated court-supervised process.

Subject to court approval, the company intends to pay vendors, suppliers and independent affiliates for goods and services provided before the expected filing date in the ordinary course of business. Under the terms of the financial restructuring plan, which will also be subject to court approval, the claims of these parties will be unimpaired.

Mood Media said it also intends to pay vendors, suppliers and independent affiliates under normal terms for goods and services provided on or after the expected filing date.

Kirkland & Ellis LLP is acting as legal adviser to Mood Media, PJ Solomon is acting as its investment banker, and Berkeley Research Group, LLC is acting as its financial adviser.

Mood Media is an Austin, Tex.-based on-premise and connected media solutions company.

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