Reorganization Items
In accordance with ASC 852 “Reorganizations" ("ASC 852"), reorganization items represent charges that are directly associated with the process of reorganizing the business under Chapter 11 of the Bankruptcy Code. For the year ended December 31, 2013, the Company recorded $38 million of reorganization items on the consolidated statement of comprehensive income (loss). The following table sets forth the details of reorganization items for the year ended December 31, 2013.
|
| | | |
| Year Ended December 31, 2013 |
| (in millions) |
Write-off of remaining unamortized debt fair value adjustment | $ | 32 |
|
Professional fees | 6 |
|
Total reorganization items | $ | 38 |
|
In conjunction with Dex One's adoption of fresh start accounting, after bankruptcy emergence on February 1, 2010, an adjustment was recorded to reflect Dex One's outstanding debt obligations at their fair value. A total discount of $120 million was recorded and was amortized as an increase to interest expense, until our filing for bankruptcy on March 18, 2013, to effectuate the merger. The write-off of remaining unamortized debt fair value adjustment of $32 million is associated with Dex One's debt obligations, which were classified as liabilities subject to compromise at March 31, 2013. ASC 852 specifies that when debt classified as liabilities subject to compromise is an allowed claim, and the allowed claim differs from the net carrying amount of the debt, the carrying amount shall be adjusted to the amount of the allowed claim. The gain or loss resulting from this adjustment shall be recognized as reorganization items. Based on our plan of reorganization and approved first-day motions of the Bankruptcy Court, the allowed debt holder claims equaled the outstanding face value of debt obligations and excluded the unamortized debt fair value adjustment associated with Dex One's debt obligations. Therefore, we recognized the remaining unamortized debt fair value adjustment as a reorganization item during the year ended December 31, 2013, which resulted in the adjustment of the carrying amount of Dex One's debt obligations to their face value.
