UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) December 15, 2005
MCLEODUSA INCORPORATED
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
0-20763 42-1407240
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(Commission File Number) (IRS Employer Identification No.)
McLeodUSA Technology Park
4200 C. Street SW, P.O. Box 3177
Cedar Rapids, IA 52406-3177
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(Address of Principal Executive Offices) (Zip Code)
(319) 364-0000
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On December 15, 2005, McLeodUSA Incorporated (the "Company") and certain of its
subsidiaries (the "Guarantors", and together with the Company, the "Debtors")
entered into the Amendment (the "Amendment") to the Revolving Credit and
Guaranty Agreement (the "DIP Agreement") among the Debtors, the lenders party
thereto, and JPMorgan Chase Bank, N.A., as agent (the "Agent"). The Amendment
increases the Letter of Credit Sub Limit under the DIP Agreement from $15.0
million to $23.4 million. The Amendment is attached hereto as Exhibit 10.1 and
is hereby incorporated by reference.
Certain of the lenders under the DIP Agreement are also lenders under the
Company's pre-petition credit agreements. In addition, some of the lenders or
their affiliates may hold equity positions in the Company.
ITEM 1.03 BANKRUPTCY OR RECEIVERSHIP.
Confirmation of Plan
On December 16, 2005, the Company issued a press release, which is hereby
incorporated by reference and attached hereto as Exhibit 99.1, announcing that
on December 15, 2005 the U.S. Bankruptcy Court for the Northern District of
Illinois confirmed the previously announced Joint Prepackaged Plan of
Reorganization of the Company and its Affiliate Debtors (the "Plan"). A copy of
the Plan as confirmed is attached as Exhibit 2.1 hereto and is hereby
incorporated by reference. Capitalized terms not otherwise defined in this
Current Report on Form 8-K have the meanings ascribed to them in the Plan.
Summary of the Plan
Under the Plan, there are three classes of Impaired Claims (Class 4 Senior
Prepetition Lender Claims, Class 5 Junior Prepetition Lender Claims and Class 6
Lease Rejection Claims) and two classes of Impaired Interests and Subordinated
Claims (Class 8 Old Preferred Stock Interests and Subordinated Claims and Class
9 Old Common Stock Interests and Subordinated Claims). All other Claims and
Interests are Unimpaired. Holders of Class 1 Non-Tax Priority Claims, Class 2
Other Secured Claims, Class 3 General Unsecured Claims and Class 7 Equity
Interests in Debtors' Subsidiaries will be unaffected by the Plan.
The Plan provides for the Company's balance sheet to be restructured by:(i)
converting the Senior Prepetition Lender Claims into New Term Loan Notes, (ii)
converting the Junior Prepetition Lender Claims into 100% of the New Common
Stock and (iii) canceling the Company's existing Preferred Stock and Common
Stock.
Outstanding Securities
As of October 31, 2005, there were 201,946,344 shares of Class A Common Stock,
78,203,135 shares of Class B Common Stock, 35,546,879 shares of Class C Common
Stock, 2,285,864 shares of Preferred Series A Stock and 10 shares of Preferred
Series B Stock issued and outstanding. Under the Plan, all such shares shall be
cancelled and no consideration will be paid or delivered with respect thereto.
On the effective date, each Holder of an Allowed Class 5 Claim shall be
entitled to receive its pro rata share of 100% of the New Common Stock pursuant
to the Plan.
Information as to Assets and Liabilities
As of September 30, 2005, and prior to giving effect to the Plan, the Company
estimated the total value of its assets at $627.2 million and its liabilities
at $1,028.1 million.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information provided in Item 1.01 of this Current Report on Form 8-K is
incorporated into this Item 2.03 by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. Description
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2.1 Joint Prepackaged Plan of Reorganization as confirmed by
the U.S. Bankruptcy Court for the Northern District
of Illinois on December 15, 2005.
10.1 Amendment dated as of December 15, 2005 to Revolving Credit
and Guaranty Agreement, dated as of November 1, 2005 among
McLeodUSA Incorporated, certain of its Subsidiaries, the
lenders party thereto and JPMorgan Chase Bank, N.A., as agent.
99.1 Press Release, dated December 16, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MCLEODUSA INCORPORATED
Dated: December 16, 2005 By: /s/ James E. Thompson
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Name: James E. Thompson
Title: Group Vice President and
General Counsel and
Secretary
EXHIBIT INDEX
Exhibit No. Description
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2.1 Joint Prepackaged Plan of Reorganization as confirmed by the
U.S. Bankruptcy Court for the Northern District of Illinois
on December 15, 2005.
10.1 Amendment dated as of December 15, 2005 to Revolving Credit
and Guaranty Agreement, dated as of November 1, 2005 among
McLeodUSA Incorporated, certain of its Subsidiaries, the
lenders party thereto and JPMorgan Chase Bank, N.A., as agent.
99.1 Press Release, dated December 16, 2005