Dictaphone exits from bankruptcy

As one imaging company nears the brink of insolvency, another has emerged from it. Dictaphone, an early developer of dictation and speech recognition technology, has formally shaken loose the bonds of Chapter 11. The Stratford, CT, company is now an independent company and no longer a subsidiary of its former parent Lernout & Hauspie Speech Products. The official emergence follows the development of a reorganization plan accepted March 13 by the U.S. Bankruptcy Court for the District of Delaware. According to the plan, Dictaphone's unsecured creditors now own 100% of the common stock of the company, prior to customary dilution for the company's incentive program. Certain creditors received warrants for the rights to acquire additional shares. Other creditors received, in the aggregate, $27.3 million of subordinated notes to be newly issued by the company. Dictaphone has also secured a $30 million commitment from GMAC Business Credit under a revolving credit facility to meet ongoing needs for working capital.