Cygnus Files for Bankruptcy Protection
Cygnus Business Media has announced an agreement with 23 of its 24 lenders on a financial restructuring under Chapter 11 of the U.S. Bankruptcy Code that will result in a secured debt-equity exchange to reduce the company's secured debt. Following the restructuring, Cygnus Business Media will have a serviceable debt level and a stronger balance sheet. The restructuring provides for payment in full of all unsecured trade debt.
Petitions were filed by the company, its parent and its subsidiaries with the U.S. Bankruptcy Court for the District of Delaware in Wilmington. The company said it expects to emerge from Chapter 11 in the next 45 days.
The reorganization plan provides that all of Cygnus' general unsecured creditors, including all suppliers and vendors, will be paid the full amounts of their claims.
"During the next month or so, while we complete the legal process, our business will continue without interruption to meet the needs of the customers in our vertical markets," said Charles Carnaval, CEO of Cygnus Business Media. "We have sufficient funds to support our working capital needs. In addition, our Court pleadings call for full support to customers and critical vendors and our Plan of Reorganization reflects the confidence of our senior lenders in Cygnus Business Media's operating future."