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Debt plan approved for Daily Record owner

The Dolan Company, the owner of The Daily Record and a provider of legal-support services and business and legal affairs publications, Monday won bankruptcy court approval of a reorganization plan that gives ownership to its lenders.

The reorganization plan will allow the company to reduce debt by $100 million to about $50 million.

“We’re no longer burdened by the heavy debt load,” said Kevin Nystrom, Dolan’s chief restructuring officer. “I think we’re on stable footing now.”

Dolan’s business information division, which includes The Daily Record, publishes business journals, legal publications and other niche print and web products for legal and business audiences in 19 geographic markets in the United States. The company’s professional services division provides professional legal services through subsidiaries DiscoverReady LLC and Counsel Press.

“What it means for us is that we put this all behind us and start moving forward again,” said Chris Eddings, vice president of the business information division and president of The Daily Record. He does not expect any major operational changes to the business information division as a result of the new ownership.

“I have a lot of confidence in our future,” he said of his division and The Daily Record.

Just last week Dolan’s Chapter 11 plan was in question, due to objections by an equity shareholders group. They said the plan constituted a hostile takeover and significantly undervalued the company.

The U.S. Bankruptcy Court for the District of Delaware approved a settlement with the equity security holders under which Dolan will transfer $3.2 million to a trust established for the shareholders’ benefit. About 20 percent of the proceeds from the trust will be distributed proportionally to preferred stockholders, and the rest will be distributed proportionally to common stockholders.

The settlement deal came about through the bankruptcy confirmation hearings, said Nystrom.

The U.S. Trustee appointed by the court previously had blocked the reorganization plan’s approval, siding with shareholders. The trustee was in court when the plan was approved Monday and did not protest.

When the company emerges from bankruptcy, it will no longer be a publicly traded company. Its preferred and common stock will be canceled.

Bayside Capital Inc. will be the majority owner of the company, which includes Dolan’s e-discovery business, DiscoverReady. The company’s board of directors will consist of three people from Bayside, Nystrom said.

The Dolan Company and DiscoverReady will be operated as separate entities, with separate human resources and accounting departments.

“Now we look like a solid, steady company and people shouldn’t have any concerns with us,” Nystrom said.

Dolan listed assets of $236.3 million and debt of $185.9 million as of Sept. 30 in Chapter 11 documents filed March 23 in U.S. Bankruptcy Court in Wilmington, Delaware. Secured debt of $153.5 million includes a $116.5 million term loan and a $37 million revolving credit.

Bayside is an affiliate of H.I.G. Capital, a global private investment company.