ST. LOUIS, MO—TLC Vision Corporation (TLCV) (TSX:TLC), announced today that it has reached an agreement with the holders of a majority of the company's senior secured debt to restructure its balance sheet.

To expedite its financial restructuring, which includes a pre-arranged plan of reorganization, the company and two of its wholly owned subsidiaries, TLC Vision (USA) Corporation and TLC Management Services Inc., have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Additionally, the company is seeking a recognition of its Chapter 11 filing in a case that it is commencing in the Ontario Superior Court of Justice under the Canadian Companies' Creditors Arrangement Act. No other company operations, affiliates or subsidiaries—including its TLC Laser Eye Centers—are involved in the filing.

TLCVision said clinical care for patients continues without change or interruption and they will continue to honor the TLC Lifetime Commitment. The company also said the filing will not affect its on-going commitments to current employees.

"This proceeding will enable us to continue providing our surgeons and eyecare professionals with the tools, technologies and services they need to deliver high-quality patient care,” said Jim Tiffany, TLCVision president and COO. “After evaluating a number of strategic alternatives with our board of directors and advisors, we decided that restructuring our debt through court protection was the best way to preserve the value of our business. We expect to emerge swiftly from Chapter 11 with a stronger balance sheet and able to better capitalize on our industry leadership position."

The company reached an agreement with a group of its senior secured lenders on a Chapter 11 plan of reorganization that provides for the following: a conversion of certain of the funded indebtedness to 100 percent of the new equity of TLC Vision (USA) Corporation, which will emerge as a privately held company; reinstatement of the balance of the funded indebtedness on restructured terms and conditions; payments to employees and critical vendors in the ordinary course of business; and distributions to certain secured and unsecured creditors. There is no assurance of any distribution of funds to the shareholders of the company under the plan.

In conjunction with today's announcement, TLCVision filed a number of first-day motions that will allow it to continue to operate in the ordinary course during the restructuring process. These motions include: immediate approval of use of a $15 million debtor-in-possession financing facility; continued payment of wages, salaries and other employee benefits; and authority to use its cash collateral.

Additionally, the company filed a motion seeking the necessary relief from the Court to pay certain critical vendors in full. In conjunction with the filing, the company has also reached agreement to sell its six refractive centers in Canada. Closing of the transaction is subject to customary conditions and approval of the Bankruptcy Court. The Canadian centers will continue to operate under the TLC Canada name.

TLCVision has established a restructuring hotline: (877) 879-5075 for U.S. and Canada callers, (503) 597-7713 for International callers. For access to Court documents and other general information about the Chapter 11 cases, visit this  Web site.