LodgeNet says that hotels, hospitals and other institutions that receive its interactive TV programming and broadband services will continue to do so “without interruption.” It has negotiated a $15M debtor-in-possession financing plan with some of its existing lenders. If the bankruptcy court in New York approves it, then it should “satisfy the customary obligations of LodgeNet’s business during the course of the restructuring process,” the company says. The announcement follows a recent $60M investment by a group led by Colony Capital. The deal was negotiated by former Fox and Gemstar-TV Guide exec Rich Batista, who became LodgeNet’s CEO in September – and left two weeks ago. If all goes as planned, then unsecured creditors will receive full payment in cash at the end of the restructuring. But owners of LodgeNet common stock and Series B Preferred shares are out of luck. The common shares — which traded for more than $35 in early 2007, and more than $4 last April — fell to less than three cents on Friday. LodgeNet has been in the dog house since last spring when it disclosed weaker than expected earnings and withdrew its guidance for the year. Its longtime CEO Scott Petersen resigned in June. Batista’s successors, co-CEOs Frank Elsenbast and James Naro, say that the recapitalization effort “is advancing on schedule” with help from Colony and “an expanded strategic partnership with DIRECTV.” LodgeNet serves about 1.5M hotel rooms worldwide, reaching 500M travelers a year, along with many U.S. healthcare facilities.
Hotel Video Supplier LodgeNet Interactive Files Prepackaged Chapter 11
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