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March 19, 2019 – LBI Media filed with the Court a motion to extend the periods during which the Company has an exclusive right to file a Chapter 11 Plan, and solicit acceptances thereof, through and including July 19, 2019 and September 17, 2019, respectively [Docket No. 696]. Absent the requested relief, the Plan filing and solicitation periods are scheduled to expire on March 21, 2019 and May 20, 2019, respectively.
The Debtors motion states, "The widely-supported Plan, which enjoys the support of nearly all impaired classes other than the Debtors’ junior bondholders, is the product of arms’ length, extensive negotiations among these parties (the 'Global Plan Settlement') that was completed in multiple stages. Prior to the Petition Date, the Debtors entered into a restructuring support agreement with the First Lien Noteholders, commencing the Chapter 11 Cases with strong stakeholder support, committed exit capital, and a powerful market message.
After the Petition Date, the Debtors and the First Lien Noteholders continued to negotiate and modify the strategic transactions contemplated by the Plan and, subsequently, in connection with the approval of the Disclosure Statement, the Debtors reached a settlement with the holder of substantially all of the outstanding Intermediate HoldCo Unsecured Notes. More recently, after discovery and investigation and analysis of various claims alleged, and after more hard-fought negotiations, the Debtors reached a settlement with the Creditors’ Committee, which provided for enhanced recoveries to holders of ongoing trade claims and general unsecured claims, who would otherwise recover nothing in a liquidation of the Debtors’ business. As a result, over 99% in dollar amount of ongoing trade claims and general unsecured claims voted to accept the Plan. See Voting Report, Ex. A (Tabulation Summary). The Debtors are committed to confirming and consummating the Plan. The Confirmation Hearing, however, is scheduled to begin on March 25, 2019, after the expiration of the current Exclusive Filing Period. The effectiveness of the Plan will not occur until regulatory approvals are obtained thereafter. Accordingly, the Debtors seek a 120-day extension of the Exclusive Filing Period and the Exclusive Solicitation Period to July 19, 2019 and September 17, 2019, respectively, without prejudice to their right to seek a further extension following either confirmation or denial of confirmation of the Plan."
On the subject of the ongoing second lien noteholder litigation, the motion states, "Moreover, the Debtors have been embroiled in protracted litigation with the an ad hoc group of their second lien noteholders (the 'Junior Noteholder Group') that has carried over into these Chapter 11 Cases, making the cases unusually complex. The Debtors have tried, unsuccessfully, to settle with the Junior Noteholder Group multiple times both prepetition and postpetition. Indeed, the Debtors have been engaged in various disputes with the Junior Noteholder Group throughout these Chapter 11 Cases and, in advance of the Confirmation Hearing, have produced over 40,000 documents and have had a large number of their officers, directors, and advisors deposed in connection with Plan Confirmation.
Litigation by the Junior Noteholder Group prevented confirmation of the Debtors’ Plan on a timeline shorter than the short one on which the parties are currently operating."
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