Source Interlink's pre-packaged plan of reorganization confirmed

By Jennifer Lanning Drey

Portland, Ore., May 29 - Source Interlink Cos., Inc. obtained court approval of its pre-packaged plan of reorganization Thursday from the U.S. Bankruptcy Court for the District of Delaware, according to an attorney.

As previously reported, Source Interlink's lenders will cancel nearly $1 billion of the company's existing debt and provide $100 million in additional liquidity.

Under the pre-packaged plan:

• Holders of debtor-in-possession revolving credit facility claims will be paid in full in cash from the company's exit financing;

• DIP term loan claims will convert into obligations under a new term loan on a dollar-for-dollar basis;

• Holders of administrative claims, priority tax claims, other priority claims and general unsecured claims will be paid in full in cash;

• Other secured claims will be reinstated;

• Revolver claims will be paid in full in cash using exit facility proceeds to the extent they are not rolled up;

• Holders of term loan claims will receive 100% of the new common stock in the reorganized company, their share of holding company loan obligations, a share of $325 million of the company's obligations under a new term loan B and up to $75 million under a term loan B if they commit to fund loans under the DIP term loan;

• Holders of senior note claims, intercompany interests, section 510(b) claims and equity interests in Source Interlink Cos. will not receive any distribution; and

• Intercompany claims will be reinstated.

Source Interlink is a media and marketing services company based in Bonita Springs, Fla. Its Chapter 11 case number is 09-11424.

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