(Updates with excerpt from court papers in fifth paragraph.)
Dec. 6 (Bloomberg) -- TMP Directional Marketing LLC, the defunct advertising agency spun off from Monster Worldwide Inc., filed bankruptcy with plans to liquidate its remaining assets.
The Chapter 11 plan has been accepted by more than 95 percent of voting creditors, according to court documents filed yesterday in U.S. Bankruptcy Court in Wilmington, Delaware.
The company estimated that unsecured creditors will collect 11 percent to 18 percent of what they are owed. Chapter 11 of the U.S. Bankruptcy Code can be used either by companies trying to reorganize and continue operating, or to liquidate.
Before it shut down in April, TMP, based in Glendale, Wisconsin, employed 400 people, according to court papers.
The company “suffered due to numerous factors, including the recent economic downturn, when the broader print advertising market declined by approximately 20 percent,” Timothy P. Nugent, TMP’s assistant treasurer said in court paper.
Almost all secured debt was repaid earlier this year. Audax Group acquired TMP Directional in the 2005 spinoff from Monster. Monster isn’t in bankruptcy and is no longer involved in the company.
TMP asked U.S. Bankruptcy Judge Mary Walrath to schedule a hearing on Jan. 17 to approve a plan to transfer all of its remaining assets to a liquidating trust that would distribute the proceeds to creditors.
The petition listed assets of $65.3 million, with debt totaling $134.8 million. Among the debt, $132.9 million is unsecured.
TMP Directional specialized in placing ads in the yellow pages of local telephone books. Secured lenders required TMP to pay them off earlier this year, helping cause the business to shut down. An ad hoc committee of unsecured creditors was formed to negotiate a Chapter 11 plan. The committee’s members have $112 million in unsecured claims, court papers say.
Secured lenders are holding $11 million cash to cover indemnification obligations, according to court papers.
The company blamed financial problems on the recession and the accompanying decline in print advertising.
The case is In re TMP Directional Marketing LLC, 11-13835, U.S. Bankruptcy Court, District of Delaware (Wilmington).
--Editors: Charles Carter, Glenn Holdcraft
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