Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
On January 3, 2013, LodgeNet Interactive Corporation (the Company), received a Staff Determination Letter from the Listing Qualifications Department of The NASDAQ Stock Market (the Staff), notifying the Company that the Companys securities will be subject to delisting from The Nasdaq Stock Market. Unless the Company requests an appeal of this determination, trading of the Companys common stock will be suspended at the opening of business on January 14, 2013, and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Companys securities from listing and registration on The Nasdaq Stock Market. The Company does not intend to request an appeal.
On December 31, 2012, the Company disclosed that it has entered into a $60 million investment agreement with Colony Capital, LLC and its affiliate, and certain other investors, to effect a recapitalization of the Company that will be implemented through an expedited Chapter 11 bankruptcy process (the Planned Bankruptcy Filing). Pursuant to the Planned Bankruptcy Filing, as previously disclosed, holders of the Companys outstanding shares of common stock and Series B Preferred Stock will have their shares cancelled without receiving any distribution.
The Staffs determination to delist the Companys securities from The Nasdaq Stock Market, in accordance with the Staffs authority under Listing Rules 5101 and IM-5101-1, was based on the Planned Bankruptcy Filing and associated public interest concerns raised by it. The Staffs letter also cited concerns regarding the residual equity interest of the existing listed securities holders, as well as concerns about the Companys ability to sustain compliance with all requirements for continued listing on The Nasdaq Stock Market, as reasons for the delisting determination.
As previously disclosed, on August 31, 2012, the Staff notified the Company that the bid price of its common stock had closed below $1 per share for 30 consecutive trading days, and accordingly, that the Company did not comply with Listing Rule 5450(a)(1). Also, as previously disclosed, on September 21, 2012, the Staff notified the Company that for the 30 consecutive days prior thereto it no longer met the market value of publicly held shares requirement of $15 million as required by Listing Rule 5450(b)(3)(C). The Company has not regained compliance with either rule.
On January 8, 2013, the Company issued a press release announcing receipt of the delisting notice. A copy of the press release is attached hereto as Exhibit 99.1.