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Vertis Holdings Submits Voluntary, Pre-Packaged Chapter 11 Filing

November 18, 2010
BALTIMORE—Nov. 18, 2010—Vertis Holdings, Inc. announced that it has elected to complete its previously announced refinancing plan through a voluntary, pre-packaged Chapter 11 filing. The recapitalization will strengthen Vertis’ capital structure by reducing the company’s total debt by approximately 60 percent, or $700 million, while substantially lowering interest costs, extending maturities and increasing liquidity. This will provide Vertis with the financial strength necessary to increase its investment in the business, advancing products and services and maintaining its position as a leading marketing communications company.

Vertis has secured a commitment for a $200 million debtor-in-possession (DIP) revolving credit facility from GE Capital. The DIP facility will provide Vertis the necessary financing to complete the confirmation of its Plan of Reorganization within 45 to 60 days and ensure that it is able to uphold its commitments to clients, employees and suppliers.

Vertis has already received commitments for $600 million in financing to be implemented under the Plan of Reorganization, including a $425 million term loan from Morgan Stanley Senior Funding and a $175 million revolving credit facility from GE Capital. Vertis has also received commitments for up to $100 million of new common equity, pursuant to its previously announced Private Placement and the associated backstops.

Vertis has filed a series of first day motions to allow the company to continue to operate in the ordinary course during the confirmation process. To this end, Vertis is seeking approval in the United States Bankruptcy Court for Southern District of New York to continue the payment of wages, salaries and other employee benefits, and to uphold all of its commitments under existing client programs. Additionally, the company’s Plan of Reorganization contemplates paying suppliers in full for all obligations.

“Our commitment to our clients, employees and suppliers is a core value for our company and a driving force in all that we do,” said Quincy L. Allen, CEO. “Today we have taken a decisive step that will enable us to expeditiously complete our recapitalization. We will emerge as an even stronger company with significant opportunities to grow our relationships with all of our stakeholders today and in the future.”

Vertis announced on Nov. 2, 2010, that holders of its Senior Secured Second Lien Notes due 2012 (the “Second Lien Notes”) and of its Senior Pay-in-Kind Notes due 2014 (the “Senior PIK Notes”) were being offered (the “Exchange Offers”) the opportunity to exchange their existing debt for equity. The Company also announced that it was soliciting acceptances of its proposed pre-packaged Chapter 11 Plan of Reorganization as an alternate path for implementing the restructuring to ensure that it would be completed on a timely basis.

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