Case Study

Undisclosed Multimedia Publishing Company

CLIENT: Second-lien lenders to an Undisclosed Multimedia Publishing Company (the "Company").

Gordian Group advised second-lien lenders in connection with a magazine publisher’s 2009 restructuring.

Business Profiles


The Company was acquired in 2007 in a transaction funded by first and second-lien debt. The Company saw a reduction of profitability as a result of operational issues, which coincided with a massive downturn in the media space. At the time of our retention, the first-lien lenders were “under water”, let alone our clients. This grim situation for our clients was further complicated by the view that an out-of-court restructuring was in the best interest for all constituencies in this case.


Even though the second-lien lenders were far out-of-the-money from a traditional valuation perspective (close to 20x near-term EBITDA), Gordian Group was able to devise strategies to create and maintain leverage in negotiations with the Company and the first-lien lenders, including the development of an alternative business plan that would aid in a potential contested valuation contest.Gordian Group was able to navigate between the disparate goals of the individual holders of the second-lien debt to develop structures that met the entire group’s requirements and, together with the negotiating leverage created, allowed the second-lien lenders to make a credible proposal to the Company and first-lien lenders—which started the restructuring negotiations.


Ultimately, the parties were able to effect a successful out-of-court restructuring that allowed the Company to delever—and provided our clients with an advantageous outcome in light of the circumstances. Despite the magnitude of first-lien debt ahead of our clients’ claims, the resolution miraculously provided for participation in the reorganized Company’s first-lien debt (i.e., provided recovery on a first-dollar-out basis), as well as a meaningful amount of equity in the reorganized Company.