LodgeNet begins pre-packaged bankruptcy

$60 million recapitalization continues as planned

LodgeNet Interactive started its pre-packaged Chapter 11 in New York on Monday, a move the company announced last month would be coming in conjunction with a $60 million cash injection by Miramax investor Colony Capital.

Its business — it’s a major video provider to hotels, among other things — will continue to operate normally. Lenders agreed to a multiyear extension of existing senior debt, and unsecured creditors will be paid in cash for any pre-petition claims at the conclusion of the restructuring process. Stockholders are the ones left holding the bag as usual, with the shares trading at a fraction of penny.

Co-CEOs Frank Elsenbast and James Naro said the recapitalization is advancing on schedule. “Thanks to the overwhelming support we’ve received from our lenders and suppliers, and with the solid commitment of Colony Capital and an expanded strategic partnership with DirecTV, we anticipate being able to complete this process on an expedited basis, and to emerge with the capacity to launch new and exciting products which will benefit both our hospitality and health-care customers.”