Summit Business Media files for Chapter 11 bankruptcy after securing approval from 83% of its lenders for a debt restructuring plan

Summit Business Media has filed for Chapter 11 bankruptcy after securing approval from 83% of its lenders for a debt restructuring plan. The reorganization will entail halving the current debt load, for a reduction of $135 million. The company says it expects to reemerge from Chapter 11 in the first half of 2011 and that normal operations at Summit will continue.

Subject to court approval, Summit will use its bank balances, currently in excess of $10 million in cash, and cash flow from its operations to meet its working capital needs throughout the reorganization process. Any pre-filing advertising, subscription and event contracts will be honored in full. Summit will pay all vendors for goods and services received during the reorganization process, and Summit employees will receive uninterrupted wages and benefits. In addition, the Company’s lenders have agreed to provide a debtor-in-possession (DIP) credit facility of $5 million to support the Company’s additional working capital needs, if any, during the restructuring.

“Summit Business Media is a fundamentally sound and profitable company,” said Andrew L. Goodenough, President and CEO. “We believe that Summit is well-positioned to take advantage of economic growth coming out of this unusually deep downturn as the industries we serve rebound. We look forward to a speedy resolution of our balance sheet restructuring while we remain focused on delivering quality products for readers and marketers in the markets we serve.”

He added, “While Summit has emerged from the downturn as a smaller but healthier company, we have too much debt to support our current business operations, left over from when Summit was a larger, acquisition-oriented company. We view this reorganization process as the last step in a two-year strategic refocusing of Summit on our core markets.”

Reed Smith is legal counsel to Summit Business Media for the restructuring and Lincoln International is acting as financial advisor.

USA, New York, NY

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