Cengage Learning Inc., the college textbook publisher in bankruptcy, won final court approval of a plan to reorganize and eliminate more than $4 billion of its $5.8 billion in funded debt.
U.S. Bankruptcy Judge Elizabeth Stong approved the plan today in Brooklyn, New York, Cengage said in a statement. A February settlement resolved all litigation with stakeholders, making the plan uncontested. Cengage said it will leave court protection in a few weeks with $1.75 billion in exit financing.
“Cengage Learning will be well-positioned to have a profound impact on the learning experience, creating long-term growth and profitability,” Chief Executive Officer Michael Hansen said in the statement.
Apax Partners LLP and Omers Capital Partners bought Cengage in 2007 from Thomson Reuters Corp. for $7.75 billion in a deal partly funded with $5.6 billion in borrowings. Cengage, based in Stamford, Connecticut, filed for Chapter 11 bankruptcy in July as debt-payment deadlines loomed and sales declined.
Under the plan, first-lien lenders will get most of the equity in the reorganized company. Second-lien and unsecured creditors will share $225 million in cash or stock, based on a total enterprise value of $3.6 billion, Cengage said.
The case is In re Cengage Learning Inc., 13-bk-44106, U.S. Bankruptcy Court, Eastern District of New York (Brooklyn)
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