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All of the Lenders under the Credit Agreement and Holders of Approximately 80% in Principal Amount of the Senior Notes Have Agreed to the Terms of the Plan
White Plains, NY, December 4, 2009 — Haights Cross Communications, Inc. (“HCC”, and together with its U.S. subsidiaries, the “Company”) announced today that it commenced a solicitation of votes for a prepackaged plan of reorganization (the “Plan”) from lenders under that certain Credit Agreement, dated as of August 15, 2008, as amended, by and among Haights Cross Operating Company (“HCOC”), as borrower, the guarantors party thereto, including HCC, and the administrative agent thereto on behalf of the lenders party thereto from time to time (the “Credit Agreement”), holders of HCOC’s 11 ¾% Senior Notes due 2011 (the “Senior Notes”) and holders of HCC’s 12 ½% Senior Discount Notes due 2011 (the “Senior Discount Notes”).
Votes on the Plan must be received by Globic Advisors, Inc., the Company’s voting agent, by January 4, 2009, unless the deadline is extended. The record date for voting is December 4, 2009. Solicitation materials are being mailed out to the lenders and noteholders as of the record date. Lenders and noteholders seeking additional information about the balloting process may contact Robert Stevens, Globic Advisors, Inc. at (800) 974-5771.
“We are pleased to announce the commencement of the solicitation of votes for our prepackaged plan of reorganization, consistent with the next critical step contemplated by our Plan Support Agreement, referenced below” said Paul J. Crecca, HCC’s President and Chief Executive Officer. “The Company’s operating businesses, Triumph Learning and Recorded Books, plan to continue operations as normal through this solicitation process as well as through the anticipated Chapter 11 case.”
As previously disclosed, on September 3, 2009 the Company entered into a plan support agreement (the “Plan Support Agreement”) with all of the lenders under HCOC’s Credit Agreement and holders of approximately 80% in principal amount of HCOC’s Senior Notes on the terms of a consensual financial restructuring that would reduce the Company’s debt obligations by approximately $200 million (to approximately $180 million in the aggregate) and extend the maturity of the Company’s debt until no earlier than three years from the effective date of the Plan. The Plan will otherwise leave unimpaired the Company’s general unsecured claims, including those of trade creditors, which would be paid in full.
Assuming the Company receives the required acceptances for the Plan, the Company intends to commence a prepackaged chapter 11 case after the conclusion of the solicitation period and seek to have the Plan confirmed by the bankruptcy court.
Simultaneously with the solicitation of votes on the Plan, HCC will commence a private rights offering for the sale of its common stock, to eligible holders of its Senior Discount Notes that are institutional accredited investors.
This press release is for informational purposes only and is not a solicitation to accept or reject the Plan referred to herein or an offer to sell or a solicitation of an offer to buy any securities of the Company. Any solicitation or offer to sell will be made pursuant to and in accordance with the disclosure statement distributed to holders of HCC’s Senior Discount Notes, lenders under HCOC’s Credit Agreement and holders of HCOC’s Senior Notes, and applicable law.
A form of the Plan and the related disclosure statement, which provide a substantial description of the restructuring, may be accessed through http://www.haightscross.com/.
Important Note
The transaction described above is subject to numerous closing conditions and there can be no assurances that the treatment of creditors outlined above will not change significantly. In the event that the Company is not able to successfully complete the restructuring contemplated by the Plan, it intends to explore all other restructuring alternatives available to it at that time. The Company cannot make assurances that any alternative restructuring arrangement or plan could be accomplished.
The above summary of the Plan is qualified in its entirety by the full text of the Plan and related disclosure statement referenced above..
This press release does not constitute an offer to sell, or the solicitation of an offer to purchase, any securities. Any such offer, if made, will be made pursuant definitive documentation to be provided to eligible security holders.
About Haights Cross Communications:
Founded in 1997 and based in White Plains, NY, Haights Cross Communications is a premier educational and library publisher dedicated to creating the finest books, audio products, periodicals, software and online services, serving the following markets: K-12 supplemental education, public and school libraries, and consumers. Haights Cross companies include: Triumph Learning, Buckle Down Publishing and Options Publishing, and Recorded Books. For more information, visit www.haightscross.com. Triumph Learning is HCC’s test-preparation and intervention business and is comprised of its Coach, Buckle Down, and Options brands. Recorded Books is a leading publisher of unabridged audiobooks and other audio media for libraries, schools, and consumers, with operations in the U.S., U.K. and Australia.
Safe Harbor Statement:
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding the Company’s plans, intentions and expectations. Such statements are subject to a variety of risks, uncertainties, and other factors known and unknown that could cause actual results to differ materially from such forward-looking statements, including, but not limited to the completion of the Company’s announced restructuring and planned operation of our business, including the outcome and impact on our business of any resulting proceedings under Chapter 11 of the Bankruptcy Code. The Company makes no assurance that it will be successful in consummating the proposed Plan and restructuring or any other restructuring proposal on favorable terms if at all, which could also adversely affect the Company’s business plans and expectations. As a result, the Company makes no assurance that the treatment of creditors outlined in this press release and included in the Plan will not change significantly. A more extensive discussion of the risk factors that could impact these areas and the Company’s overall business and financial performance can be found in the Company’s reports previously filed with the Securities and Exchange Commission and the Disclosure Statement. The risks included above are not exhaustive. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based.
Investor Contact:
Paul J. Crecca
(914) 289-9420
pjcrecca@haightscross.com
Mark Kurtz
(914) 289-9480
mkurtz@haightscross.com
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