Key3Media's reorganization plan approved in court; expects to emerge from bankruptcy June 17

By Carlise Newman

Chicago, June 4 - Key3Media Group Inc. said it has received court approval for its reorganization plan and the company expects to emerge from Chapter 11 on June 17, the date the plan will become effective.

The plan of reorganization, filed May 5, was supported by 100% of Key3Media's secured creditors. In addition, substantially all of the company's unsecured creditors voted for the plan, representing a clear majority of total unsecured indebtedness, the company said.

Under the plan, general unsecured creditors will receive $2.5 million in cash, 40% of the net proceeds of an insurance claim up to a maximum of $4 million, warrants to purchase up to 5% of the reorganized company's equity with a strike price at the reorganization value and potential additional minor assets that remain subject to final negotiation.

Thomas Weisel Capital Partners has agreed to forego its pro rata share of the distribution to unsecured creditors to which it otherwise would be entitled because it holds $110 million face amount of the company's subordinated notes.

The Los Angeles information technology tradeshow and conference organizer will emerge from its restructuring with debt reduced by 87% and annual interest expense reduced by 91%. Thomas Weisel Capital Partners, which supported Key3Media throughout the restructuring process as a creditor and with DIP financing, will own at least 90% of the equity of the recapitalized company upon the company's emergence. In addition, certain unsecured creditors will have the right to purchase up to 10% of the company's equity.

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