Globix obtains backing from holders of notes, preferreds for reorganization

New York, Feb. 15 - Globix Corp. said holders of its senior notes and preferred stock backed the company's proposed reorganization.

As a result, the New York-based internet hosting, network and application solutions company said it plans to make a Chapter 11 bankruptcy filing in the week of Feb. 19 and expects to emerge by the end of March.

Among those voting on the proposal, 97.5% of Globix's senior notes by principal amount and 97% by holders supported the plan and 100% of preferred shareholders cast ballots in favor.

Bondholders will exchange the existing $500 million of senior notes for $120 million of new senior secured notes and 85% of the reorganized company's common stock. Holders of the existing preferred will receive 14% of the new common stock. Current stockholders will receive 1% of the new common stock.

In addition to cutting its debt burden, the plan will also allow Globix to make interest payments in kind for at least two years and possible up to four years.

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