UPDATE 1-Cygnus Chapter 11 plan gets bankruptcy court OK

Sept 11 (Reuters) - Cygnus Business Media Inc said its reorganization plan was approved by a U.S. bankruptcy court on Tuesday and that it expects to emerge from Chapter 11 protection in less than two weeks.

Cygnus said that under the reorganization plan, a portion of its secured debt would be converted into equity, making it easier to service the debt.

General unsecured creditors of the company, including all vendors, will be paid in full under the plan.

The company filed a "pre-packaged" bankruptcy in August after failing to reach an agreement with one of its 24 lenders on a financial restructuring plan.

In a pre-packaged bankruptcy filing, a company negotiates a restructuring plan outside of Chapter 11 and allows its creditors to vote on the plan prior to the bankruptcy filing, which accelerates the process in court.

Cygnus had listed assets and liabilities in the range of $100 million to $500 million in its Chapter 11 filing.

GE Commercial Finance, to which Cygnus owes about $173 million, was listed as the largest unsecured creditor.

In court filings, Cygnus said it employed about 680 people and had 42 trade publications.

The case is In re: Cygnus Business Media Inc, U.S. Bankruptcy Court, District of Delaware, No.09-12768. (Reporting by Santosh Nadgir in Bangalore; Editing by Pradeep Kurup)