TLC Vision reaches agreement with holders of Company's senior secured debt to restructure balance sheet

Dec 22 2009

TLC Vision Corporation (NASDAQ: TLCV) (TSX: TLC), North America's premier eye care services company, said today that it has reached an agreement with holders of a majority of the Company's senior secured debt to restructure its balance sheet.

To expedite its financial restructuring, which includes a pre-arranged plan of reorganization, the Company and two of its wholly owned subsidiaries, TLC Vision (USA) Corporation and TLC Management Services Inc., have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. In addition, the Company is seeking a recognition of its Chapter 11 filing in a case that it is commencing in the Ontario Superior Court of Justice under the Canadian Companies' Creditors Arrangement Act. No other company operations, affiliates or subsidiaries -- including its TLC Laser Eye Centers -- are involved in the filing.

TLCVision said clinical care for patients continues without change or interruption. TLCVision will continue to honor the TLC Lifetime Commitment. The Company also said the filing will not affect its on-going commitments to current employees.

The Company said that it and a group of its senior secured lenders have agreed on a Chapter 11 plan of reorganization. The plan provides for the following: a conversion of certain of the funded indebtedness to 100% of the new equity of TLC Vision (USA) Corporation, which will emerge as a privately held Company; reinstatement of the balance of the funded indebtedness on restructured terms and conditions; payments to employees and critical vendors in the ordinary course of business; and distributions to certain secured and unsecured creditors. There is no assurance of any distribution of funds to the shareholders of the Company under the plan.

TLCVision President and Chief Operating Officer Jim Tiffany said, "This proceeding will enable us to continue providing our surgeons and eye care professionals with the tools, technologies and services they need to deliver high-quality patient care. After evaluating a number of strategic alternatives with our board of directors and advisors, we decided that restructuring our debt through court protection was the best way to preserve the value of our business.

"We expect to emerge swiftly from Chapter 11 with a stronger balance sheet and able to better capitalize on our industry leadership position."

In conjunction with today's announcement, TLCVision filed a number of first-day motions that will allow it to continue to operate in the ordinary course during the restructuring process. These motions include: immediate approval of use of a $15 million debtor-in-possession financing facility; continued payment of wages, salaries and other employee benefits; and authority to use its cash collateral. Additionally, the Company filed a motion seeking the necessary relief from the Court to pay certain critical vendors in full. In conjunction with the filing, the Company has also reached agreement to sell its six refractive centers in Canada. Closing of the transaction is subject to customary conditions and approval of the Bankruptcy Court. The Canadian centers will continue to operate under the TLC Canada name.