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Master Graphics Emerges From Bankruptcy

May 2001
MEMPHIS, TN—There is light at the end of the bankruptcy tunnel for Master Graphics. The company announced that its First Amended Joint Plan of Reorganization became effective March 7, marking the company's emergence from its voluntary Chapter 11 cases filed in July 2000.

Creditors voting on the reorganization plan approved the plan, with 89 percent of the creditors who voted and 99 percent of the dollar amount of the claims voting in favor of the plan.

The plan was confirmed by the U.S. Bankruptcy Court for the District of Delaware in Wilmington on January 25. Master Graphics has met all requirements to emerge from Chapter 11 and implementation of the court-approved joint plan concludes its formal restructuring process.

Master Graphics also announced that, in connection with its emergence from Chapter 11, a new five-member board of directors has been formed. CEO Calvin W. Aurand Jr. has been appointed chairman. Aurand succeeds former CEO Michael Bemis.

"Since commencing our voluntary Chapter 11 case, we have successfully restructured and improved our financial structure," Aurand states. "This process has allowed Master Graphics to put behind it many of the challenges of the past, permitting the company to emerge from Chapter 11 with a significantly de-leveraged balance sheet, cash to fund operations, and a streamlined and centralized core business structure. These actions, together with the hard work of our employees, form a stronger foundation for future growth."

According to the plan, the company's existing common stock was cancelled and substantially all of the new common stock of the reorganized company will be distributed to general unsecured creditors, including holders of Master Graphics' senior notes, on account of and in cancellation of their claims.

The company has entered into a $60 million exit facility with General Electric Capital, maturing in 2006. In connection with the exit financing commitment, the exit facility lenders will receive warrants to purchase up to 15 percent of the newly issued common stock. Allowed secured, administrative and priority claims will be paid by the reorganized company upon final allowance by the bankruptcy court or as agreed with specific creditors.

Additional new directors include: Richard C. Holliday, William H. Lawson Jr., F. Duffield Meyercord and James P. Seery Jr.

"I want to thank all of our employees, vendors and customers for their cooperation and dedication during Master Graphics' restructuring," Aurand adds. "In particular, I want to acknowledge the contributions of Mike Bemis, who joined the board as an independent director in February 2000 and who stepped up to lead the company's successful Chapter 11 reorganization as interim CEO over the last eight months. Under his stewardship, the company is now well-positioned to meet and exceed the challenges of the printing industry, and to continue to provide its clients with the quality and service which have long been trademarks of this organization."
 

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