In the United States Bankruptcy Court for the Eastern District of Virginia Richmond Division
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Case 21-30209-KRH Doc 26 Filed 01/25/21 Entered 01/25/21 06:34:50 Desc Main Document Page 1 of 163 THIS IS NOT A SOLICITATION OF ACCEPTANCE OR REJECTION OF THE PLAN. ACCEPTANCES OR REJECTIONS MAY NOT BE SOLICITED UNTIL A DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY COURT. THIS DISCLOSURE STATEMENT IS BEING SUBMITTED FOR APPROVAL BUT HAS NOT BEEN APPROVED BY THE COURT. IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF VIRGINIA RICHMOND DIVISION ) In re: ) Chapter 11 ) ALPHA MEDIA HOLDINGS LLC, et al.,1 ) Case No. 21-30209 (KRH) ) Debtors. ) (Joint Administration Requested) ) DISCLOSURE STATEMENT FOR JOINT PLAN OF REORGANIZATION OF ALPHA MEDIA HOLDINGS LLC AND ITS DEBTOR AFFILIATES Justin Bernbrock (pro hac vice admission pending) Michael A. Condyles (VA 27807) Bryan Uelk (pro hac vice admission pending) Peter J. Barrett (VA 46179) SHEPPARD, MULLIN, RICHTER & HAMPTON LLP Jeremy S. Williams (VA 77469) 70 West Madison Street, 48th Floor Brian H. Richardson (VA 92477) Chicago, Illinois 60602 KUTAK ROCK LLP Telephone: (312) 499-6300 901 East Byrd Street, Suite 1000 Facsimile: (312) 499-6301 Richmond, Virginia 23219-4071 Telephone: (804) 644-1700 -and- Facsimile: (804) 783-6192 Colin Davidson (pro hac vice admission pending) SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 30 Rockefeller Plaza New York, New York 10112 Telephone: (212) 653-8700 Facsimile: (212) 653-8701 Proposed Co-Counsel to the Debtors and Debtors-in-Possession Dated: January 24, 2021 1 The Debtors in these chapter 11 cases, along with the last four digits of each debtor’s federal tax identification number, are: Alpha Media Holdings LLC (3634), Alpha Media USA LLC (9105), Alpha 3E Corporation (0912), Alpha Media LLC (5950), Alpha 3E Holding Corporation (9792), Alpha Media Licensee LLC (0894), Alpha Media Communications Inc. (5838), Alpha 3E Licensee LLC (6446), Alpha Media of Brookings Inc. (7149), Alpha Media of Columbus Inc. (7140), Alpha Media of Fort Dodge Inc. (2022), Alpha Media of Joliet Inc. (7142), Alpha Media of Lincoln Inc. (7141), Alpha Media of Luverne Inc. (7154), and Alpha Media of Mason City Inc. (3996). Alpha Media Communications LLC does not have a federal employee identification number. The mailing address for the Debtors is 1211 SW 5th Avenue, Suite 750, Portland, OR 97204. -1- 59ZT-318353 Case 21-30209-KRH Doc 26 Filed 01/25/21 Entered 01/25/21 06:34:50 Desc Main Document Page 2 of 163 NOTHING CONTAINED HEREIN SHALL CONSTITUTE AN OFFER, ACCEPTANCE, COMMITMENT, OR LEGALLY BINDING OBLIGATION OF THE DEBTORS OR ANY OTHER PARTY IN INTEREST, AND THIS DISCLOSURE STATEMENT IS SUBJECT TO APPROVAL BY THE BANKRUPTCY COURT AND OTHER CUSTOMARY CONDITIONS. THIS DISCLOSURE STATEMENT IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES IMPORTANT INFORMATION ABOUT THIS DISCLOSURE STATEMENT SOLICITATION OF VOTES ON THE JOINT CHAPTER 11 PLAN OF REORGANIZATION OF ALPHA MEDIA HOLDINGS LLC AND ITS DEBTOR AFFILIATES PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE FROM THE HOLDERS OF OUTSTANDING: VOTING CLASSES NAME OF CLASS UNDER THE PLAN CLASS 2 FIRST LIEN DEBT CLAIMS CLASS 3 SECOND LIEN NOTES CLAIMS IF YOU ARE IN CLASS 2 OR CLASS 3, YOU ARE RECEIVING THIS DOCUMENT AND THE ACCOMPANYING MATERIALS BECAUSE YOU ARE ENTITLED TO VOTE ON THE PLAN. DELIVERY OF BALLOTS CLASS 2 OR CLASS 3 BALLOTS MAY BE RETURNED IN THE ENCLOSED PRE-PAID, PRE-ADDRESSED RETURN ENVELOPE WITH THE BALLOT OR TO AN ADDRESS BELOW, AND MUST BE RECEIVED BY THE SOLICITATION AGENT BY THE VOTING DEADLINE, WHICH IS [•] [A.M./P.M.] (PREVAILING EASTERN TIME) ON [•], [•], 2021. BY REGULAR MAIL AT: BY HAND DELIVERY OR OVERNIGHT MAIL AT: Alpha Media Alpha Media Ballot Processing Center Ballot Processing Center c/o Stretto c/o Stretto 410 Exchange, Suite 100 410 Exchange, Suite 100 Irvine, CA 92602 Irvine, CA 92602 VIA E-BALLOT PORTAL. SUBMIT YOUR BALLOT FORM VIA THE SOLICITATION AGENT’S ONLINE PORTAL, BY VISITING HTTPS://BALLOTING.STRETTO.COM/ (THE “E BALLOT PORTAL”). ENTER THE E-BALLOT ID# PROVIDED AND FOLLOW THE INSTRUCTIONS TO SUBMIT YOUR BALLOT. PLEASE CHOOSE ONLY ONE METHOD TO RETURN YOUR BALLOT. CLASS 2 AND CLASS 3 BALLOTS MUST BE ACTUALLY RECEIVED BY THE SOLICITATION AGENT BY THE VOTING DEADLINE, WHICH IS [•] [A.M./P.M.] (PREVAILING EASTERN TIME) ON [•], [•], 2021, VIA THE ENCLOSED PRE-PAID, PRE- -ii- 59ZT-318353 Case 21-30209-KRH Doc 26 Filed 01/25/21 Entered 01/25/21 06:34:50 Desc Main Document Page 3 of 163 ADDRESSED RETURN ENVELOPE, OR AS OTHERWISE DIRECTED ON THE BALLOT: BALLOTS RECEIVED VIA EMAIL OR FACSIMILE WILL NOT BE COUNTED IF YOU HAVE ANY QUESTIONS REGARDING THE PROCEDURE FOR VOTING ON THE PLAN, PLEASE CONTACT THE SOLICITATION AGENT AT: BY E-MAIL TO: [email protected] BY TELEPHONE: (855) 395-0761 (TOLL FREE) OR +1 (949) 617-0086 (INTERNATIONAL) This disclosure statement (this “Disclosure Statement”) provides information regarding the Joint Chapter 11 Plan of Reorganization of Alpha Media Holdings LLC and Its Debtor Affiliates (as may be amended, supplemented, or otherwise modified from time to time, the “Plan”), for which the Debtors will seek confirmation by the Bankruptcy Court.2 A copy of the Plan is attached hereto as Exhibit A and is incorporated herein by reference. The Debtors are providing the information in this Disclosure Statement to certain holders of Claims for purposes of soliciting votes to accept or reject the Plan. Pursuant to the Restructuring Support Agreement, the Plan is currently supported by the Debtors and the RSA Parties (consisting of the holders of the Second Lien Notes Claims and the Prepetition Holdco Notes Claims). The consummation and effectiveness of the Plan are subject to certain material conditions precedent described herein and in Article IX of the Plan. There is no assurance that the Bankruptcy Court will confirm the Plan or, if the Bankruptcy Court does confirm the Plan, that the conditions necessary for the Plan to become effective will be satisfied or, in the alternative, waived. The Debtors urge each holder of a Claim or Interest to consult with its own advisors with respect to any legal, financial, securities, tax, or business advice in reviewing this Disclosure Statement, the Plan, and each proposed transaction contemplated by the Plan. The Debtors strongly encourage holders of Claims in Class 2 and Class 3 to read this Disclosure Statement (including the Risk Factors described in Article VII hereof) and the Plan in their entirety before voting to accept or reject the Plan. Assuming the requisite acceptances to the Plan are obtained, the Debtors will seek the Bankruptcy Court’s approval of the Plan at the Confirmation Hearing. 2 Capitalized terms used but not otherwise defined in this Disclosure Statement have the meanings ascribed to such terms in the Plan. The summary of the Plan provided herein is qualified in its entirety by reference to the Plan. In the case of any inconsistency between this Disclosure Statement and the Plan, the Plan will govern. -iii- 59ZT-318353 Case 21-30209-KRH Doc 26 Filed 01/25/21 Entered 01/25/21 06:34:50 Desc Main Document Page 4 of 163 RECOMMENDATION BY THE DEBTORS EACH DEBTOR’S BOARD OF DIRECTORS, MEMBER, OR MANAGER, AS APPLICABLE, HAS APPROVED THE TRANSACTIONS CONTEMPLATED BY THE PLAN AND DESCRIBED IN THIS DISCLOSURE STATEMENT, AND EACH DEBTOR BELIEVES THAT THE COMPROMISES CONTEMPLATED UNDER THE PLAN ARE FAIR AND EQUITABLE, MAXIMIZE THE VALUE OF EACH OF THE DEBTOR’S ESTATES, AND PROVIDE THE BEST RECOVERY TO CLAIM AND INTEREST HOLDERS. AT THIS TIME, EACH DEBTOR BELIEVES THAT THE PLAN AND RELATED TRANSACTIONS REPRESENT THE BEST ALTERNATIVE FOR ACCOMPLISHING THE DEBTORS’ OVERALL RESTRUCTURING OBJECTIVES. EACH OF THE DEBTORS THEREFORE STRONGLY RECOMMENDS THAT ALL HOLDERS OF CLAIMS WHOSE VOTES ARE BEING SOLICITED SUBMIT BALLOTS TO ACCEPT THE PLAN BY RETURNING THEIR BALLOTS SO AS TO BE ACTUALLY RECEIVED BY THE SOLICITATION AGENT NO LATER THAN [•], 2021 AT [•] [A.M. / P.M.] (PREVAILING EASTERN TIME) PURSUANT TO THE INSTRUCTIONS SET FORTH HEREIN AND ON THE BALLOTS. -iv- 59ZT-318353 Case 21-30209-KRH Doc 26 Filed 01/25/21 Entered 01/25/21 06:34:50 Desc Main Document Page 5 of 163 SPECIAL NOTICE REGARDING FEDERAL AND STATE SECURITIES LAWS The Bankruptcy Court has not reviewed this Disclosure Statement or the Plan, and the securities to be issued on or after the Effective Date will not have been the subject of a registration statement filed with the United States Securities and Exchange Commission (the “SEC”) under the United States Securities Act of 1933, as amended (the “Securities Act”), or any securities regulatory authority of any state under any state securities law (“Blue Sky Laws”). The Plan has not been approved or disapproved by the SEC or any state regulatory authority and neither the SEC nor any state regulatory authority has passed upon the accuracy or adequacy of the information contained in this Disclosure Statement or the Plan. Any representation to the contrary is a criminal offense. The Debtors are relying on section 4(a)(2), Regulation D and/or Regulation S of the Securities Act, and similar Blue Sky Laws provisions, and, to the extent it is available, section 1145 of the Bankrtupcy Code, to exempt from registration under the Securities Act and Blue Sky Laws the offer to the holders of Second Lien Notes Claims prior to the Petition Date, including in connection with the solicitation of votes to accept or reject the Plan (the “Solicitation”). After the Petition Date, the Debtors may rely on section 1145(a) of the Bankruptcy Code, in addition to the exemptions listed above, to exempt from registration under the Securities Act and Blue Sky Laws the offer, issuance, and distribution of New Common Stock and New Holdco Warrants under the Plan, and the shares of New Common Stock issuable upon exercise of the New Holdco Warrants.