Yellow Media - Company Amendment Rejected by Superior Court of Quebec - New Amended Plan Unacceptable to Convertible Debentureholders' Committee

MONTREAL, Sept. 4, 2012 /CNW Telbec/ - The Ad Hoc Committee of Holders of 6.25% Convertible Unsecured Subordinated Debentures (the "Committee") announced that, on August 31, 2012, the Superior Court of Quebec granted, with costs, a motion brought by the Committee and summarily rejected an attempt by Yellow Media Inc. (the "Company") to tie the hands of its creditors in a potential "fast-track" insolvency proceeding.  The Committee had vigorously contested the amended Debtholders' Arrangement Resolution published by the Company on August 28, 2012, which, if approved, would have had the effect of subverting the legal process by deeming all Debtholders to have consented to a pre-packaged CCAA procedure.  The Committee is pleased that the Court ruled that the Company's amendment was a violation of the conditions for amendment under the provisions of the Quebec Code of Civil Procedure, was neither necessary nor useful and that it shall not be submitted to the vote of any of the Debtholders in the proposed CBCA arrangement.

On September 4, 2012, the Company unilaterally amended its plan of arrangement to marginally increase the recovery to Convertible Debentureholders.  The Committee firmly believes that the amendment is grossly inadequate and does not constitute a meaningful or bona fide attempt to satisfy the legitimate concerns, expectations and rights of the Convertible Debentureholders.

The Committee's counsel, Mark E. Meland of the law firm Fishman Flanz Meland Paquin LLP, stated that: "The Committee is very disappointed that the Company has not yet engaged in a constructive process to seek to obtain the support of its stakeholders but rather has unilaterally put forward a plan of arrangement that is neither fair nor reasonable."

The members of the Committee, which represents numerous retail and institutional holders of the Convertible Debentures, remain resolutely against the proposed plan of arrangement, as amended.  They intend to: (i) exercise the Opt-Out Election entitling them to vote at the Debtholders' Meeting and (ii) register their votes against the proposed plan of arrangement.

The Committee once again strongly urges the Company to withdraw the proposed plan of arrangement, as amended, which it believes is manifestly unfair to Convertible Debentureholders, and to forthwith engage with all stakeholders in a fair and transparent consultative process.

By this press release, the Committee is not providing investment advice to any third parties and it suggests that Convertible Debentureholders should contact their own investment advisors to seek independent advice as to how they should register their votes. This press release is not a request for a proxy or to execute or not execute or revoke a proxy. This press release is not intended to result in the procurement, withholding or revocation of a proxy or otherwise intended to be a solicitation of proxies from any securityholder and no proxies are expected following this announcement.

SOURCE: Ad Hoc Committee

For further information:

SOURCE: Ad Hoc Committee of Holders of 6.25% Convertible Unsecured Subordinated Debentures

For further information regarding this press release or to participate in the Committee, please contact Mark E. Meland, 514-932-4100 ext. 213 (mmeland@ffmp.ca) or Jason Dolman, 514-932-4100 ext. 272 (jdolman@ffmp.ca).

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Ad Hoc Committee

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