Dex Media, Inc. is a digital marketing company that has undergone organizational changes, mergers, and bankruptcies within the past decade. Now it is preparing for yet another bankruptcy to begin in December 2015.
The Chapter 11 bankruptcy filing is meant to alleviate over $2.3 billion in debt with the help of its senior lenders. The company has been struggling with its debt since at least September 30, when a group of junior bondholders threatened involuntary bankruptcy as a result of the company skipping interest payments. Now the company is seeking the support of a wider group of lenders in preparation for the filing.
The two businesses that merged to form Dex Media both previously went through bankruptcy filings of their own. R. H. Donnelley Corp. filed for Chapter 11 bankruptcy in May of 2009. It emerged from the proceedings as Dex One Corp. and soon decided to merge with SuperMedia Inc. This company had also filed for bankruptcy in August 2012. The merged company filed again in March 2013 in a pre-packaged bankruptcy that was intended to facilitate the merger.
Dex Media, Inc. intends to allow investors to recover on their investments. However, the aggression from junior creditors will likely lengthen and complicate the proceedings. The fact that the company is already in default because it skipped the September 30th interest payment does not simplify matters. The holders have declared that the debt is immediately due in full. The company is also in default on four term loans, but the agreements allow for additional time for restructuring.
Dex Media, Inc. shares have lost 98.5% of their value this year. Hopefully this round of bankruptcy and restructuring will help the company enough to finally become profitable and self-sufficient.
Daniel A. Higson 