Bankruptcy Court Approves Vertis’ Reorganization

The U.S. Bankruptcy Court for the District of Delaware has approved Vertis Communication’s prepackaged reorganization plan, as well as that for American Color Graphics. The approval clears the way for Vertis' merger with American Color Graphics. After the merger, Vertis is expected to emerge from Chapter 11 in mid-September.

Vertis maintained business as usual during the restructuring, including paying vendors in the ordinary course of business, according to a company statement. The company expects to continue normal operations through the remainder of the case and pay all trade creditors in the ordinary course without interruption. Under the prepackaged plan, trade creditors are being paid in full.

Vertis filed a prepackaged reorganization plan on July 15. The reorganization plan includes a $250 million Senior Secured Revolving Credit exit facility from GE Commercial Finance and a $400 million exit facility from Morgan Stanley Senior Funding, Inc., as lead arranger.

The financial restructurings will reduce the combined company's debt obligations (including the off-balance sheet accounts receivable facility and approximately $248 million of Vertis Holdings Mezzanine Notes) by approximately $1 billion before transaction fees and expenses. The noteholders of Vertis and American Color Graphics will exchange their bonds for an aggregate of $550 million in new notes and substantially all of the new equity in the merged company.