LodgeNet Files for Chapter 11

Before you go, we thought you'd like these...
Before you go close icon

On Monday, hospitality and health-care industry services provider LodgeNet Interactive announced it has received the consent of its senior debtholders to proceed with a "prepackaged Chapter 11" bankruptcy process originally announced back in December. Over the course of the next 60 days, LodgeNet expects to enter into Chapter 11, recapitalize itself with $60 million from a "syndicate" of companies led by global investment firm Colony Capital, and emerge as a subsidiary of Colony.

"Throughout this process, LodgeNet's business operations will continue in the normal course, and current hospitality and health-care customers will continue to receive services without interruption," LodgeNet said in a statement.

Lenders participating in the process are said to have given "overwhelming support" to the prepackaged bankruptcy plan, which promises to extend the duration of existing senior debt and pay unsecured creditors "in full in cash for any prepetition claims." Holders of LodgeNet common stock and of Series B preferred stock, however, will be wiped out entirely.

Despite the clear statement that the shares are certainly worthless, LodgeNet common stock dropped only $0.01, and by close of trading it was still fetching $0.02 a share.

The article LodgeNet Files for Chapter 11 originally appeared on Fool.com.

Fool contributor Rich Smith and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading