Intermark, Triton Ask Chapter 11 Protection

Intermark and its Triton Group subsidiary on Monday filed for voluntary Chapter 11 protection in U.S. Bankruptcy Court in San Diego.

La Jolla-based Intermark submitted a plan that has been “agreed to in principle” by a committee consisting of bondholders from Intermark and Triton, Intermark Senior Vice President Michael M. Earley said. A final plan to be submitted later must be approved by creditors before it becomes effective.

The agreement calls for the two companies to be combined. Holders of $206 million in subordinated debt and other creditors would be granted 99% of the new company’s stock. Current holders of Intermark and Triton common and preferred shares would hold just 1% of the new company’s stock, according to terms of the agreement.

Intermark and Triton, which have been struggling to pay interest on debt accumulated in recent years, began negotiating with major bondholders in April and stopped making required payments to bondholders in June.

Intermark now owns major positions in seven operating companies, none of which is subject to the bankruptcy filing, Earley said. “It’s important to recognize that this filing doesn’t involve the operating companies,” Early said. “They have their own management teams and their own credit.”

Intermark hopes to emerge from bankruptcy proceedings within six months, Intermark Chairman John C. Stiska said.