Cengage Learning Mediator Appointed


The U.S. Bankruptcy Court approved Cengage Learning’s motion for entry of an order approving the appointment of a mediator and scheduling mediation in connection with confirmation of the Debtors’ Plan. According to the order, “The Court authorizes and appoints the Honorable Robert D. Drain, United States Bankruptcy Judge for the Southern District of New York, to serve as Mediator in these Chapter 11 Cases and to conduct the mediation…As outlined on the record at the Hearing, the Mediator is authorized to mediate any issues concerning, among other things, the allocation of estate value among the various creditor constituencies and the terms of a plan of reorganization for the Debtors, including the following disputes: the total enterprise value of the Debtors; foreign and domestic subsidiary valuation; the Disputed Copyrights (including products and proceeds) and the terms of any licensing arrangements thereof proposed in the Debtors’ contemplated plan of reorganization; whether the First Lien Lenders can assert their total claim against each Debtor; whether the First Lien Lenders have any valid or perfected liens on the Debtors’ cash, including the Disputed Cash; the 2007 Leveraged Buy-Out; the March 2013 revolver draw and the Debtors’ use of the proceeds thereof (and similar issues relating to fundings to CLI under the Debtors’ cash management system); substantive consolidation; whether certain intercompany obligations are properly classified as debt or equity or subject to equitable subordination or other claims or defenses, and other intercompany issues relevant to any of the Parties; certain intercreditor issues, including the Apax Partners, L.P. declaratory judgment complaint, rights pursuant to the intercreditor agreements, including the applicability of turnover provisions, and claims made by various Parties of breach of the intercreditor agreements by certain of the parties thereto; issues regarding the trust structure of the Debtors’ contemplated plan of reorganization, governance of the trust and the proposed use, sale or lease of any assets placed in trust; and certain other plan confirmation or other issues appropriate for mediation, as determined by the Parties and the Mediator.”

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