Digital Media Solutions Completes $95M Credit Bid Sale

Digital Media Solutions, Inc. (DMS) exited chapter 11 through a $95 million lender credit bid that transferred its core digital advertising business to an investor group led by BlackRock funds and accounts, and the bankruptcy court closed the last of the cases in March 2026. DMS filed its chapter 11 petitions on September 11, 2024 in the U.S. Bankruptcy Court for the Southern District of Texas (Houston Division), lead case 24-90468. DMS is a Clearwater, Florida digital performance advertising company that connects advertisers with consumer inquiries across insurance, education, and consumer verticals. The business describes its offering as digital performance advertising solutions that combine data, marketing technology, and paid media to drive customer acquisition. Court filings show that DMS served roughly 1,800 customers in 2023 and generated a revenue mix concentrated in insurance and consumer segments, with a smaller education line. The company was founded in 2012, received a 2016 investment from Clairvest, and went public through a SPAC transaction with Leo Holdings Corp. in 2020 at an enterprise value of $757 million. DMS later delisted from the NYSE in 2023 and went private in August 2024.

In mid-September 2024, DMS entered chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of Texas with a restructuring centered on a court-supervised sale to existing lenders and a DIP facility of about $122 million. The restructuring also separated the ClickDealer affiliate marketing platform, which the company later agreed to sell for an $8 million base price, while the core business was sold to a lender-led investor group. The court approved the asset sales on November 4, 2024, the plan and disclosure statement were confirmed on January 15, 2025, and the lender-led transaction closed on February 28, 2025. The buyer group included BlackRock funds and accounts, with Bain Capital, Blackstone, and Abry Partners also participating.

Debtor(s)	Digital Media Solutions, Inc. (37 jointly administered debtors)
Court	U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number	24-90468
Judge	Hon. Alfredo R. Perez
Petition Date	September 11, 2024
Confirmation Date	January 15, 2025
Final Decree	March 24, 2026 (all remaining cases closed, including lead case)
Headquarters	Clearwater, Florida
Total Funded Debt	About $346.1 million (prepetition funded debt)
DIP Facility	About $121.9 million (including $30 million new money)
Stalking Horse Bid	$95 million credit bid by prepetition lenders
Sale Closing	February 28, 2025 (lender consortium acquisition)
Projected GUC Recovery	3.1%–8.3% (Class 4 general unsecured claims)

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Digital Media Solutions Completes $95M Credit Bid Sale

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Restructuring Path and Court Milestones

The chapter 11 cases were designed around a sale and a rapid confirmation timeline rather than a long operating reorganization. DMS and 36 affiliates filed together, and the First Day Declaration placed a lender-supported sale at the center of the process. Court filings describe a prepetition marketing process that ran for nearly five months beginning in late April 2024, but no third-party going-concern stalking horse emerged. The debtors therefore moved forward with a lender credit bid, supported by the DIP term loan and a plan that tied recoveries to a waterfall based on distributable proceeds.

Pre-negotiated structure. The filing was announced alongside an agreement to transition ownership to existing lenders and a section 363 process intended to transfer the core assets to a lender-led buyer group. The same announcement tied the restructuring to a DIP facility of about $122 million that provided new-money liquidity and rolled up prepetition loans.

The court entered an interim DIP order on September 13, 2024 and required an expedited sequence of milestones. The Bidding Procedures Order was approved on October 16, 2024, and sale orders for the core business and the ClickDealer assets were entered on November 4, 2024. The Plan of Reorganization and disclosure statement were filed in December 2024, and the court entered findings of fact, conclusions of law, and an order approving the disclosure statement and confirming the plan on January 15, 2025. A Final Decree closing the affiliated cases was entered on March 28, 2025, leaving the lead case open for post-confirmation administration.

Case administration. The cases were jointly administered, allowing the court to manage motions and orders on a consolidated basis while preserving separate debtor estates. Omni Agent Solutions, Inc. was appointed as the claims, noticing, and solicitation agent on the petition date, and the confirmed plan established a plan administrator, John P. Madden of Emerald Capital Advisors, to resolve claims, administer distributions, and handle remaining estate matters after the sale closed.

Advisors and professional fees. The restructuring announcement identified Kirkland & Ellis LLP and Porter Hedges LLP as debtor counsel, Houlihan Lokey Capital, Inc. as investment banker, and Portage Point Partners as restructuring advisor. Final fee applications through the January 15, 2025 confirmation date requested about $9.6 million for Kirkland & Ellis, $3.4 million for Houlihan Lokey, $2.9 million for the Portage Point restructuring team (Triple P RTS, LLC), and $0.25 million for Porter Hedges. Counsel to the official committee of unsecured creditors, Willkie Farr & Gallagher LLP and Venable LLP, requested $0.67 million and $0.74 million for the first interim period, with Emerald Capital Advisors requesting about $0.51 million as committee financial advisor.

Path to Bankruptcy and Advertising Cycle Exposure

Court filings and contemporaneous reporting point to a demand shock in insurance advertising that hit DMS while the company was already posting sequential revenue declines. A report on the filing noted that auto insurance loss ratios were unusually low during the COVID period, which supported advertising spend, but loss ratios worsened in 2022 and ad budgets fell. The First Day Declaration put insurance at about 29% of 2023 revenue, consumer categories at about 60%, and education at about 11%, leaving DMS heavily exposed to the auto insurance advertising cycle.

Macroeconomic headwinds. Court filings cite inflation and post-pandemic behavior shifts that reduced advertising spend, particularly in property and casualty insurance, at the same time DMS was managing a cost structure built around higher-volume lead flow.

The operating impact showed up in revenue and covenant metrics. Court filings show net revenue declines of 15.3% in Q4 2022, 17.2% in Q1 2023, and 9.5% in Q2 2023, which contributed to covenant defaults under the credit agreement. A Florida business report put 2023 revenue at $334.9 million, down 14.4% year over year, and Q1 2024 revenue at $70.7 million, down 21% year over year. DMS also reported a net loss of $122.7 million for full-year 2023 and in April 2024 received $22 million in new financing from existing lenders as management began exploring strategic alternatives.

Strategic review and liquidity pressures. Management and the board initiated a strategic review in April 2024, a process also described in industry coverage. Court filings show that the prepetition marketing process ran for nearly five months and did not produce a third-party going-concern stalking horse bid. The filings also describe a failed sale of the education software business and liquidity pressure tied to reduced cash flow and preferred stock redemption obligations, leading the company to pursue a lender-supported credit bid structure in chapter 11. The NYSE delisting and August 2024 going-private transition noted above followed the strategic review and preceded the September chapter 11 petitions.

Capital Structure and the Priming DIP Facility

The First Day Declaration lists prepetition funded debt of about $346.1 million across several term loan tranches and a revolving facility, with maturities in 2026, plus $14 million of preferred equity issued in March 2023. The debt stack was structured around a large term loan facility with multiple tranches, a bridge term loan, and a revolving credit facility, and the Series A and B preferred stock carried redemption obligations that added pressure as operating cash flow declined.

Prepetition obligation	Amount	Notes
Initial term loan	$207.5 million	Maturity May 25, 2026; SOFR plus 8.0% or base rate plus 7.0%
Tranche B term loan	$68.0 million	Maturity May 25, 2026; same interest grid
Tranche A bridge term loan	$24.1 million	Maturity February 25, 2026; cash and PIK interest options
Revolving facility	$46.5 million	Maturity May 25, 2026
Preferred equity	$14 million	Series A and B preferred stock

Interest and maturity profile. The initial term loan and tranche B term loan carried interest at SOFR plus 8.0% or base rate plus 7.0%, with PIK options available before March 31, 2025, and the bridge term loan included cash and PIK options. The Tranche A bridge term loan arose from an April 2024 out-of-court restructuring: S&P Global downgraded DMS to 'SD' after the company executed a distressed debt exchange that included a PIK interest toggle extension on existing debt and issuance of the $24.1 million bridge term loan, a transaction that provided short-term liquidity without resolving the underlying revenue pressure. With maturities in 2026, the facilities created a near-term refinancing horizon while revenue was declining, and the same lender group provided the DIP facility. Public reporting put total debt at $301.9 million as of Q1 2024.

The DIP Motion outlined a $121.9 million priming term loan, consisting of $30 million of new money and a $91.9 million roll-up of prepetition term loans. The financing carried a mix of cash and PIK interest, an 8.0% closing premium, and a $1.5 million exit premium, and the Final DIP Order set milestones requiring an interim order within three days of filing, a final DIP order and bidding procedures order within 30 days, a sale hearing by day 50, and closing within 30 days after the sale hearing.

DIP facility component	Amount	Detail
Total DIP facility	$121.9 million	Senior secured priming term loan
New money	$30.0 million	$13 million at interim; $17 million at final
Roll-up	$91.9 million	$21.7 million tranche A roll-up; $70.2 million tranche B roll-up
Interest rate	Base rate plus 7.0% or SOFR plus 8.0%	1.0% cash, balance PIK
Fees	8.0% closing premium; $1.5 million exit premium	DIP agent fee $37,500 annually

Credit Bid Sale and ClickDealer Disposition

The sale process was anchored by a $95 million credit bid from the prepetition lenders, designated as the stalking horse, with consideration that also included assumed liabilities and cure costs for executory contracts. The Bidding Procedures Motion set the sale timeline, and an auction on October 29, 2024 confirmed the lenders' bid for the core assets and selected iMonMedia for ClickDealer, as recorded in the Notice of Successful Bidders.

Stalking horse structure. Court filings describe the purchaser as the party designated by the DIP required lenders, with consideration that included the credit bid, assumed liabilities, and cure costs for executory contracts. The restructuring announcement noted that ClickDealer subsidiaries were included in the broader sale process but not part of the chapter 11 debtors, a structure that allowed the affiliate marketing platform to transfer through a separate asset sale.

The court entered sale orders for the core business and the ClickDealer assets on November 4, 2024. The lender-led acquisition of substantially all operating assets closed on February 28, 2025 with an investor group led by BlackRock funds and accounts and participation from Bain Capital, Blackstone, and Abry Partners. ClickDealer was sold separately to iMonMedia, described in the sale approval release as a global performance marketing company, for an $8 million base price plus working capital adjustments and the assumption of certain liabilities. Bloomberg Law reported the combined consideration across both transactions at approximately $103 million. The closing announcement said the operating business would continue under new ownership, while the ClickDealer platform transferred to iMonMedia under its own purchase agreement. Wingspire Capital provided a $30 million revolving credit facility to the emerged business in connection with the sale closing.

Plan Treatment and Waterfall Distribution

The confirmed liquidating plan organizes recoveries through a waterfall tied to distributable proceeds and assigns claim classes based on priority and collateral status. The Plan of Reorganization states that Class 3 prepetition loan claims were allowed in the aggregate principal amount of $273,430,197.21, plus accrued interest and fees, and that holders of allowed Class 4 general unsecured claims share in distributable proceeds and, if they are not deficiency claim holders, also receive a pro rata share of the unsecured claims recovery pool.

Impairment and voting. The plan treats Classes 1 and 2 as unimpaired and therefore presumed to accept. Classes 3 and 4 are impaired and entitled to vote, while Class 7 equity interests and Class 8 section 510(b) claims are impaired and deemed to reject. Intercompany claims and interests in Classes 5 and 6 receive no distributions and may be reinstated or otherwise settled at the debtors' option.

Class	Claim type	Impairment	Treatment summary
Class 1	Other secured claims	Unimpaired	Paid in full in cash, receive collateral, reinstated, or otherwise rendered unimpaired
Class 2	Other priority claims	Unimpaired	Treated in accordance with section 1129(a)(9)
Class 3	Prepetition loan claims	Impaired	Pro rata share of distributable proceeds under the waterfall recovery
Class 4	General unsecured claims	Impaired	Pro rata share of distributable proceeds; eligible holders also share in the unsecured claims recovery pool
Class 5	Intercompany claims	Unimpaired or impaired	Reinstated or otherwise settled at debtor option; no distributions
Class 6	Intercompany interests	Unimpaired or impaired	Reinstated or otherwise settled at debtor option; no distributions
Class 7	Existing DMS Inc. interests	Impaired	Pro rata share of distributable proceeds, if any
Class 8	Section 510(b) claims	Impaired	Cancelled and extinguished with no distributions

The Confirmation Order includes debtor and third-party releases and exculpation provisions and establishes the post-confirmation governance structure used to wind down estates, resolve claim objections, and administer distributions tied to the sale proceeds.

Projected recoveries. The disclosure statement estimated that holders of allowed Class 4 general unsecured claims would recover between approximately 3.1% and 8.3% under the plan, compared with no recovery in a hypothetical chapter 7 liquidation. The debtors estimated aggregate general unsecured claims of between roughly $14.1 million and $34.6 million, with a median near $23.8 million. The prepetition agent agreed to waive any distribution from the unsecured claims recovery pool on account of allowed prepetition loan deficiency claims, preserving that pool for Class 4 holders. The disclosure statement did not state a fixed recovery percentage for Class 3 prepetition loan claims, whose recoveries depend on distributable proceeds under the waterfall, and equity recoveries were left contingent on residual proceeds, if any.

Plan Objections and the Third-Party Release Dispute

Two confirmation objections and an earlier committee challenge shaped the contested record. The U.S. Trustee filed an objection to confirmation on January 7, 2025, arguing that the plan's nonconsensual third-party releases were not authorized under the Bankruptcy Code. Citing the Supreme Court's Purdue Pharma decision, the U.S. Trustee argued that the plan's opt-out mechanism, which bound non-voting creditors to third-party releases unless they affirmatively opted out, did not constitute consent under state contract law, that the releases reached unknown claims, and that the related permanent injunction lacked statutory authority.

Presidio Interactive Corporation filed a separate objection to confirmation the same day, arguing that the plan's exculpation provision was broad enough to limit DMS's liability for conduct at issue in Presidio's pending adversary proceeding and asking the court to carve that conduct out of the exculpation. Presidio also disputed a cure amount DMS asserted against it. The court overruled all unresolved objections on the merits with prejudice in the January 15, 2025 confirmation order.

Earlier in the case, the official committee of unsecured creditors filed an omnibus objection on October 14, 2024 to both the DIP financing and bidding procedures motions, challenging whether the DIP terms favored the secured lenders and whether the bidding procedures maximized value. The matter was resolved before the court entered the Final DIP Order on November 4, 2024.

Key Case Timeline and Post-Confirmation Status

The DMS chapter 11 case moved quickly from filing to sale approval, then to plan confirmation and the closing of the affiliated cases. The timeline below tracks the major court milestones.

Date	Event
September 11, 2024	Chapter 11 petitions filed
September 12, 2024	First day declaration filed
September 13, 2024	Interim DIP order entered
October 16, 2024	Bidding procedures order entered
October 29, 2024	Auction held; successful bidders identified
November 4, 2024	Sale orders entered for core assets and ClickDealer assets
December 9, 2024	Plan of reorganization and disclosure statement filed
January 15, 2025	Order approving disclosure statement and confirming the plan entered
February 28, 2025	Sale closed to lender-led investor group
March 6, 2025	Plan effective date
March 28, 2025	Final decree entered closing affiliated cases; lead case remains open
February 27, 2026	Plan administrator files motion for final decree to close remaining cases
March 24, 2026	Final decree entered closing all eight remaining cases, including lead case

The plan administrator, John P. Madden of Emerald Capital Advisors, resolved claims through at least nine rounds of omnibus objections during 2025 and maintained reserves for two disputed claims: about $995,856 for Spring Venture, held until December 29, 2029, and $40,000 for Liberty Mutual, held until July 13, 2035, with any remaining reserve funds designated for Class 4 general unsecured creditors. Q1 2026 post-confirmation reporting recorded cumulative cash disbursements of about $3.94 million since the effective date, with priority claims paid in full and general unsecured claims paid roughly 5% of allowed amounts to date, within the disclosure statement's projected 3.1% to 8.3% range.

After the plan administrator filed a motion for a final decree on February 27, 2026, the court entered a final decree closing the eight remaining cases, including the lead case, on March 24, 2026. The decree deemed each wind-down debtor dissolved while preserving the plan administrator's authority to administer and distribute the remaining reserves without reopening the closed cases. The operating business continues under new ownership.

Frequently Asked Questions

Why did DMS file for chapter 11?

Court filings cite declining advertiser spend and revenue pressure, and a report on the filing tied the downturn to weakening auto insurance loss ratios and reduced advertising budgets. DMS also reported 2023 revenue of $334.9 million and Q1 2024 revenue of $70.7 million, both down year over year.

Who bought DMS and when did the sale close?

The core business was sold to an investor group led by BlackRock funds and accounts, with Bain Capital, Blackstone, and Abry Partners participating. The transaction closed on February 28, 2025.

What happened to ClickDealer?

ClickDealer was sold to iMonMedia for an $8 million base price plus working capital adjustments.

What did unsecured creditors recover?

The disclosure statement projected a 3.1% to 8.3% recovery for Class 4 general unsecured claims, against no recovery in a hypothetical chapter 7. Q1 2026 reporting showed general unsecured claims paid roughly 5% of allowed amounts, with priority claims paid in full.

Is the bankruptcy case still open?

No. The court entered a final decree on March 24, 2026 closing all eight remaining cases, including the lead case, after substantial consummation of the plan.

Who is the claims agent for Digital Media Solutions?

Omni Agent Solutions, Inc. was appointed claims, noticing, and solicitation agent by order entered on the petition date. Under the March 24, 2026 final decree, Omni was directed to deliver the electronic proofs of claim to the clerk of court as the remaining cases closed.

For related coverage of lender credit-bid sales and liquidating chapter 11 plans, see A.B.C. Carpet's 888 Capital credit bid and 40.7% GUC recovery, Accelerate Diagnostics' 97-day credit bid sale, and American Tire Distributors' DIP, 363 sale, and confirmed wind-down plan.