McLeodUSA Emerges from Chapter 114/18/2002 7:34 AM Eastern
McLeodUSA Inc. successfully escaped from the trenches of
The competitive local-exchange carrier's security holders approved an amended
reorganization plan, calling for McLeodUSA to distribute $670 million in cash to
its senior-note holders. These note holders will receive new preferred series-A
stock and warrants.
As part of the deal, McLeodUSA will also distribute new common stock to its
old preferred shareholders.
The company's stock resumed trading on the NASDAQ exchange Thursday --
trading was halted Jan. 30. The stock last traded at 18 cents per share.
Buyout firm Fortsmann Little & Co. has upped its equity-investment
commitment to $175 million in exchange for a 23 percent stake of the reorganized
Including the preferred stock stake it already holds, Fortsmann has increased
its stake in the company to 58 percent, making it the largest McLeodUSA
McLeodUSA also entered a five-year revolving-credit facility valued at $110
million. The bank group is led by J.P. Morgan Chase & Co., Bank of America
LLC and Citibank.