December 22, 2009 / 9:49 PM / 10 years ago

UPDATE 1-Judge formally OKs Idearc's bankruptcy exit plan

* Total debt to be cut to $2.75 bln from about $9 bln

* Paulson & Co to own nearly half the company

NEW YORK, Dec 22 (Reuters) - Bankrupt U.S. yellow-pages publisher Idearc Inc IDARQ.PK said on Tuesday that a U.S. judge has formally approved its reorganization plan, allowing the company to emerge from bankruptcy by the end of the year.

Judge Barbara Houser of the U.S. Bankruptcy Court in Dallas, has signed the order approving its plan following a two-day hearing on the earlier this month, the company said in a statement.

Under the company’s bankruptcy exit plan, its total debt will be reduced to about $2.75 billion from about $9 billion, and hedge fund Paulson & Co will take ownership of nearly half the company’s stock when it emerges from bankruptcy.

Idearc, which was spun off from Verizon (VZ.N) in 2006, filed for protection from creditors in March, as revenue for its printed directories business dwindled due to a shift to online search and advertising.

Its current shares will be canceled, and the reorganized company plans to list new shares once it emerges from bankruptcy.

The case is In re: Idearc Inc, U.S. Bankruptcy Court, Northern District of Texas, No. 09-31828. (Reporting by Emily Chasan; Editing by Tim Dobbyn)

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