Dolan Co., a provider of legal-support services and publishing, won court approval of a reorganization plan that gives ownership to lenders, less than three months after seeking creditor protection.
Dolan filed for bankruptcy in March, struggling to cut debt linked to its foreclosure processing business. Before the filing, secured lenders including Bayside Capital Inc. voted on a plan designed to reduce debt by about $100 million to about $50 million by giving them all the new stock and at least $50 million in new debt. Bayside is now the majority owner.
“Confirmation of the plan is a key step in unlocking the company’s businesses from the weight of debt associated with the company’s former mortgage foreclosure processing businesses,” Chief Restructuring Officer Kevin Nystrom said in a statement.
Before the confirmation hearing, a committee of equity holders and Minneapolis-based Dolan agreed to a distribution of cash, which resolved the panel’s objection. Equity holders will get a pro rata share of $2 million and a $1.2 million note receivable, according to court documents filed today. The $3.2 million will be put in a trust for the benefit of holders of the company’s preferred and common stock.
Dolan listed assets of $236.3 million and debt of $185.9 million as of Sept. 30 in Chapter 11 documents filed March 23 in U.S. Bankruptcy Court in Wilmington, Delaware. Secured debt of $153.5 million includes a $116.5 million term loan and a $37 million revolving credit.
Bayside Capital is an affiliate of H.I.G. Capital, a global private investment firm.
The case is In re Dolan Co., 14-bk-10614, U.S. Bankruptcy Court, District of Delaware (Wilmington).