Vertis Holdings Submits Voluntary, Pre-Packaged Chapter 11 Filing

BALTIMORE—Nov. 18, 2010—Vertis Holdings, Inc. announced that it has elected to complete its previously announced refinancing plan through a voluntary, pre-packaged Chapter 11 filing. The recapitalization will strengthen Vertis’ capital structure by reducing the company’s total debt by approximately 60 percent, or $700 million, while substantially lowering interest costs, extending maturities and increasing liquidity. This will provide Vertis with the financial strength necessary to increase its investment in the business, advancing products and services and maintaining its position as a leading marketing communications company.

Vertis has secured a commitment for a $200 million debtor-in-possession (DIP) revolving credit facility from GE Capital. The DIP facility will provide Vertis the necessary financing to complete the confirmation of its Plan of Reorganization within 45 to 60 days and ensure that it is able to uphold its commitments to clients, employees and suppliers.

Vertis has already received commitments for $600 million in financing to be implemented under the Plan of Reorganization, including a $425 million term loan from Morgan Stanley Senior Funding and a $175 million revolving credit facility from GE Capital. Vertis has also received commitments for up to $100 million of new common equity, pursuant to its previously announced Private Placement and the associated backstops.

Vertis has filed a series of first day motions to allow the company to continue to operate in the ordinary course during the confirmation process. To this end, Vertis is seeking approval in the United States Bankruptcy Court for Southern District of New York to continue the payment of wages, salaries and other employee benefits, and to uphold all of its commitments under existing client programs. Additionally, the company’s Plan of Reorganization contemplates paying suppliers in full for all obligations.

“Our commitment to our clients, employees and suppliers is a core value for our company and a driving force in all that we do,” said Quincy L. Allen, CEO. “Today we have taken a decisive step that will enable us to expeditiously complete our recapitalization. We will emerge as an even stronger company with significant opportunities to grow our relationships with all of our stakeholders today and in the future.”

Vertis announced on Nov. 2, 2010, that holders of its Senior Secured Second Lien Notes due 2012 (the “Second Lien Notes”) and of its Senior Pay-in-Kind Notes due 2014 (the “Senior PIK Notes”) were being offered (the “Exchange Offers”) the opportunity to exchange their existing debt for equity. The Company also announced that it was soliciting acceptances of its proposed pre-packaged Chapter 11 Plan of Reorganization as an alternate path for implementing the restructuring to ensure that it would be completed on a timely basis.

Early voting results as of Nov. 15, 2010, the deadline by which eligible note holders were required to vote in order to receive a consent payment, indicated a low likelihood of reaching the 98% participation levels established in the out-of court exchange offers. Vertis thus determined that commencing a voluntary prepackaged filing prior to the Dec. 1, 2010, voting deadline was the right path to complete its recapitalization in the near term. As of Nov. 17, 2010, the company has received overwhelming acceptances of its Plan of Reorganization. Specifically, of those holders of Second Lien Notes that have voted on the Plan, 98.29% in aggregate principal amount of the Second Lien Notes have voted to accept the Plan. Of those holders of Senior PIK Notes that have voted on the Plan, 99.98 percent in aggregate principal amount of the Senior PIK Notes have voted to accept the Plan.

“Our note holders’ support for our Plan of Reorganization and the committed financing we have secured are clear votes of confidence in the strength of our business and our strategy for the future of being a leading marketing communications company,” Allen continued. “We are confident our recapitalization will allow us to both achieve our financial goals and support our mission.”

Vertis is hereby announcing the cancellation of the Exchange Offers and related consent solicitations. As a result of such cancellation, no Notes will be accepted for exchange, and related consents will be cancelled. All Notes tendered pursuant to the Exchange Offers will promptly be returned to their holders.

Additional information about Vertis’ restructuring can be found at a dedicated website, www.thefuturevertis.com, and at the claims agent’s Website at www.kccllc.net/vertis. The company also has established a supplier call center at (877) 489-1434, SupplierSupport@vertisinc.com.

About Vertis
Vertis is a results-driven marketing communications company that delivers inventive advertising, direct marketing and interactive solutions to prominent brands across North America. Our deep industry knowledge and extensive range of offerings—including integrated data solutions, digital program management systems, creative services, world-class print and mail production, logistics, out-of-home and business process outsourcing—are used to deliver superior program performance that drives bottom line results for our clients.

Source: Company press release.