Catalina Marketing pre-packaged Chapter 11 plan effective on Feb. 15

By Caroline Salls

Pittsburgh, Feb. 19 – Catalina Marketing Corp. has completed its financial restructuring and emerged from Chapter 11 bankruptcy, according to a company news release.

Catalina’s pre-packaged plan of reorganization was confirmed on Jan. 31 by the U.S. Bankruptcy Court for the District of Delaware. A notice filed with the court said the plan took effect on Friday.

Through this process, Catalina said it has reduced its debt by 85% – to $276 million from $1.9 billion – and moves forward under new ownership comprised of its existing lenders.

As previously reported, Catalina reached an agreement with more than 90% of the company’s first-lien lenders and more than 75% of its second-lien lenders on the terms of a restructuring support agreement to restructure its balance sheet.

The disclosure statement for the company’s pre-packaged plan said the restructuring will leave the Catalina debtors’ businesses intact and will substantially deleverage their capital structure.

The plan calls for the distribution of new common stock to pre-bankruptcy secured lenders, with 90% to be allocated on account of first-lien debt claims and 10% on account of second-lien debt claims, each subject to dilution by a management incentive plan.

There will be no impairment to the debtors’ other creditors, except specified rejection claims and general unsecured PDM claims. Creditors in both of those classes will receive no distribution.

Other general unsecured claims will continue to be paid or disputed as if the Chapter 11 filing never occurred.

Existing equity interests will be cancelled.

“This is an exciting day for Catalina as we just became a stronger and very competitive company with solid cash flow, low debt, a healthy balance sheet and a robust digital product pipeline,” president and chief executive officer Jerry Sokol said in the release.

“We believe we have the best media and data platforms, and we are accelerating our investment in disruptive technologies to further Catalina’s in-store, digital, data and advanced analytics businesses to help our customers transform the buyer experience.

“We are also fortifying our buyer intelligence data and adding depth to our personalization capabilities to power our new digital products and solutions.”

The company said Michael Bailey will serve as chief technology officer, reporting to Sokol.

Bailey’s primary focus will be on enhancing and scaling the company’s computing power and data security and optimizing performance of all Catalina’s data and analytics solutions.

Bailey joins chief product officer Kevin Hunter and chief data and analytics officer Wes Chaar.

Weil, Gotshal & Manges LLP served as legal counsel, Centerview Partners LLC served as financial adviser, and FTI Consulting served as restructuring adviser to Catalina.

Catalina is a St. Petersburg, Fla.-based provider of personalized digital media. The company filed bankruptcy on Dec. 12 under Chapter 11 case number 18-12794.

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