Comdex Parent in Bankruptcy
The plan is expected to help the company, which produces the Comdex, NetWorld+Interop and Seybold Seminars trade shows, restructure $372 million worth of debt service that swallowed its cash and forced it into negotiations with creditors.
The company has indicated for months now that it might not have enough cash to continue operations, especially as the technology recession resulted in sharply lower attendance at its trade shows.
Thomas Weisel Capital Partners said it would provide $30 million worth of debtor-in-possession financing in order to fund the company's ongoing operations and help it continue producing trade shows while it reorganized operations.
Following a particularly sluggish Comdex show last fall in Las Vegas, the company went into default on some of its bank loans after it missed interest payments in December after warning that it might not be able to continue servicing its debt.
Even before the annual Comdex trade show, Key3Media moved to scale back its 2003 trade show schedule, cut 175 jobs and closed its offices in Needham, Mass., and moved to transfer its operations to its Los Angels and Foster City, California.
Key3Media officials said the bankruptcy plan it is submitting to a Delaware bankruptcy court today would help eliminate about 87 percent of its debt and reduce its obligations to about $50 million. Key3Media was also delisted from the New York Stock Exchange in July of this year and has been subjected to speculation from Moody's Investors Service as to whether the trade show host will be forced to default on its senior secured credit facility loans.