PRC LLC, a Plantation, Fla.-based provider of outsourced customer management, has filed for chapter 11 bankruptcy protection. The move comes just 14 months after Diamond Castle Holdings acquired PRC from IAC/Interactive Corp. for $286.5 million (including $130m of equity). Under terms of the proposed restructuring, PRC creditors will provide up to $30 million in DIP financing, plus reorganization financing if/when PRC emerges from bankruptcy protection.
PRC, LLC, a leading provider of outsourced customer management, announced today that it and certain of its debtor affiliates (“PRC“) filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. The purpose of the Chapter 11 proceeding is to effect a financial restructuring on terms agreed between the Company, its senior secured lenders and its second lien secured lenders. The filing allows the Company to operate in the normal fashion under court protection while it reorganizes.
In conjunction with the filing, certain of the Company's existing lenders have agreed to provide PRC with up to $30 million in debtor-in-possession financing. The lender group has also agreed to provide post-reorganization financing when PRC exits from Chapter 11.
H. Eugene Lockhart, Chairman of PRC's Board, said, “Today's Chapter 11 filing enables PRC to restructure its debt while we continue operating and supporting our clients and their customers. With the support of our secured lenders, we believe that we have embarked on a course of action that will benefit our clients, suppliers and employees. Our goal is for PRC to complete its restructuring without disruption to the customers it serves and to emerge financially stable, highly competitive and with a promising future.“
Jerry McElhatton, PRC's Chief Executive Officer said that decision to file under Chapter 11 had been a difficult, but necessary, step to effect the financial restructuring. He said, “We intend to complete the Chapter 11 process as quickly as possible. In the meantime, we will remain focused on delivering top quality customer management solutions for our clients and on supporting the PRC employees who provide these services to their customers every day.“
Speaking about the agreement on restructuring terms with the secured lender groups and the commitments for debtor-in-possession and post-restructuring financing, Philip Goodeve, PRC's Chief Financial Officer said, “We are very pleased to have already achieved this significant progress on our restructuring and to have the financial support of a group of our existing lenders during and after the reorganization process. This demonstrates their belief, shared by the Company, in the value of PRC.“ He noted that, upon Court approval, the debtor-in-possession financing should be more than sufficient to finance the Company's operations through the Chapter 11 process.
Concurrently with the Chapter 11 filing, PRC engaged Dallas-based CXO, L.L.C., a restructuring and turnaround firm and named Stephen Dub