Yesterday, trade publisher Cygnus Business Media filed for Chapter 11 bankruptcy protection in order to restructure its debt.
Cygnus reached an agreement with 23 out of 24 secured lenders on a financial restructuring deal that will swap debt-equity for the company’s secured debt. However, an out of court deal required a unanimous decision and the hold-out lender pushed Cygnus to file a prepackaged bankruptcy plan in Delaware Bankruptcy Court, in the hopes of swiftly ushering in the restructuring plan. Under the plan, the company’s secured debt will be reduced from $180 million to $60 million, Folio reported.
Cygnus says it expects its plan to gain court approval in about 45 days, during which time its employees and vendors will be paid and business will continue as usual.
“During the Chapter 11 process, the company will be fully capable of meeting its obligations in the ordinary course,” the company said in a statement. “Management is confident that this process will result in a less leveraged company that is well-suited to compete in a challenging economy.”
A Cygnus spokewoman told FishbowlNY that the bankruptcy filing was in no way related to the 50 jobs it slashed and the four publications it suspended two weeks ago. “There was nothing more we could do for those publications this year given the current economy,” the rep said.
Cygnus currently publishes 44 trade publications, like Firehouse and Law Enforcement Technology. and has 35 Web sites and Web portals. The company also produces 34 trade shows, including some of the biggest in their markets.