Chapter 11 usually comes to mind when large corporations fall into financial distress and need bankruptcy relief. Typically the debtor files for protection and proposes a reorganization plan, which the creditors will then vote on before final approval is given by the bankruptcy court.
It may not come as a surprise to many that one of the country’s largest phone book publishers, Dex, is planning to file for Chapter 11 business bankruptcy protection next month for the third time in seven years.
Widespread consumer preference for internet over print publishers has hurt many directory companies who have lost much of their advertising revenue to search engines such as Google, Bing and Yahoo.
Despite efforts to reinvent itself by merging with SuperMedia with plans to cut costs and shift the combined company’s focus to selling locally targeted online ads and marketing services to small businesses, Dex’s transformation failed.
Dex, which published approximately 1,700 yellow pages and white pages directories in 2014, plans to ask its board to approve the Chapter 11 restructuring and then approach creditors to vote on the plan. The Texas company owes creditors a total of $2.3 billion.
Source: Wall Street Journal, “Phone Book Publisher Dex Media Preparing to File for Bankruptcy”, by Matt Jaremsky, April 19, 2016.