Stockholders' Deficiency	12 Months Ended
Dec. 31, 2012
Stockholders' Deficiency
Stockholders' Deficiency	Note 11 — Stockholders’ Deficiency Pursuant to the completion of the Chapter 11 process, holders of the preferred stock, common stock, and options or warrants to purchase shares of our common stock will have their interests cancelled and will not receive any distribution. Perpetual Preferred Stock —Subject to the declaration of dividends by our Board of Directors, cumulative dividends on the preferred stock will be paid at a rate of 10% per annum of the $1,000 liquidation preference per share, starting from the date of original issue, June 29, 2009. Dividends accumulate quarterly in arrears on each January 15, April 15, July 15 and October 15, beginning on October 15, 2009. Dividend payments not to exceed $5,750,000 in any fiscal year are allowable under the restricted payment basket as defined within the First Amendment to our Credit Facility agreement. In the event dividends are not declared and are in arrears, the Company would be required to pay accumulated and unpaid dividends upon conversion. Additionally, the preferred shareholders would receive a conversion rate approximately 10% higher than the original conversion rate. The payment of dividends on our preferred stock requires our Board of Directors to declare such dividend payable. Our Board of Directors determined not to declare dividends with respect to the second half of 2012. Accordingly, we have not recorded the preferred stock dividends for such period. However, the preferred stock dividends have been included in our earnings per share computation (see Note 2) for the year ended December 31, 2012 pursuant to ASC 260-10-45-11. The amount in arrears is also included in preferred stock dividends on the Consolidated Statements of Operations for the year ended December 31, 2012. The deferred dividends of $2.7 million will accumulate in accordance with the terms of the preferred stock and, as of December 31, 2012, the total arrearage on the preferred stock was $2.7 million. The preferred stock is convertible at any time, at the option of the holder, at an initial conversion rate of 264.5503 shares of common stock per share of preferred stock, equal to an initial conversion price of $3.78 per share. This represents a conversion premium of approximately 10%, based on the closing bid price of $3.43 per share of common stock on June 23, 2009. On or prior to July 15, 2014, we may elect to convert some or all of the preferred stock into shares of common stock, if the closing price of our common stock has exceeded 150% of the conversion price for at least 20 of the 30 consecutive trading days ending the trading day before our notice of the conversion. If we elect to convert any preferred stock on or prior to July 15, 2014, we will also make a payment on the preferred stock, in cash or shares of common stock, equal to the aggregate amount of dividends which would have accumulated and become payable through and including July 15, 2014, less any dividends already paid on the preferred stock. After July 15, 2014, we may elect to convert some or all of the preferred stock into shares of common stock, if the closing price of our common stock has exceeded 125% of the conversion price for at least 20 of the 30 consecutive trading days ending the trading day before our notice of the conversion. If we elect to convert any preferred stock after July 15, 2014, we will make an additional payment on the preferred stock, in cash or shares of common stock, for all accumulated and unpaid dividends to and including the conversion date. If the holder elects to convert their shares of preferred stock in connection with a fundamental change, as defined, (such as a merger or acquisition) which occurs on or prior to July 14, 2014, we will increase the conversion rate of the preferred stock surrendered for conversion. In addition, upon a fundamental change when the stock price of the common stock is less than $3.43 per share (the closing bid price as of June 23, 2009), the holder may require us to convert some or all of the preferred stock at a conversion rate equal to the liquidation preference, plus all accumulated and unpaid dividends, divided by 97.5% of the market price of our common stock, subject to a cap on the aggregate number of shares of common stock to be issued. Common Stock — In March 2010, we entered into an agreement to sell 2,160,000 shares of our common stock, $0.01 par value per share, to an underwriter for resale to the public at a price per share of $6.00, less an underwriting discount of $0.36 per share. We completed our offering of 2,484,000 shares (inclusive of the underwriter’s option to purchase the additional 324,000 shares to cover overallotments), bringing the total aggregate common stock sold to $14.9 million. Net proceeds from the issuance of common stock were $13.7 million, with offering and related costs totaling $1.2 million. Stockholder Rights Plan — In February 2008, we adopted a stockholder rights plan, which was approved by the stockholders at the Annual Meeting on May 14, 2008. The rights plan is intended to maximize stockholder value by providing flexibility to the Board of Directors in the event an offer for LodgeNet is received which is either inadequate or not in the best interest of all stockholders. In connection with the investment agreement with the Colony Syndicate, in January 2013, the stockholder rights plan was amended so that the entry into the investment agreement with the Colony Syndicate does not and will not trigger purchase rights under the stockholder rights plan. Warrants — In October 2010, we issued a warrant to a professional services company, granting it the right to purchase up to 25,000 shares of our common stock at a price of $3.75 per share. Proceeds from the issuance were $46,000. The warrant became exercisable on the date the professional services were delivered to us in January 2011. The warrant includes anti-dilution provisions and expires on October 15, 2013.

Note 11 — Stockholders’ Deficiency

Pursuant to the completion of the Chapter 11 process, holders of the preferred stock, common stock, and options or warrants to purchase shares of our common stock will have their interests cancelled and will not receive any distribution.

Perpetual Preferred Stock —Subject to the declaration of dividends by our Board of Directors, cumulative dividends on the preferred stock will be paid at a rate of 10% per annum of the $1,000 liquidation preference per share, starting from the date of original issue, June 29, 2009. Dividends accumulate quarterly in arrears on each January 15, April 15, July 15 and October 15, beginning on October 15, 2009. Dividend payments not to exceed $5,750,000 in any fiscal year are allowable under the restricted payment basket as defined within the First Amendment to our Credit Facility agreement. In the event dividends are not declared and are in arrears, the Company would be required to pay accumulated and unpaid dividends upon conversion. Additionally, the preferred shareholders would receive a conversion rate approximately 10% higher than the original conversion rate.

The payment of dividends on our preferred stock requires our Board of Directors to declare such dividend payable. Our Board of Directors determined not to declare dividends with respect to the second half of 2012. Accordingly, we have not recorded the preferred stock dividends for such period. However, the preferred stock dividends have been included in our earnings per share computation (see Note 2) for the year ended December 31, 2012 pursuant to ASC 260-10-45-11. The amount in arrears is also included in preferred stock dividends on the Consolidated Statements of Operations for the year ended December 31, 2012. The deferred dividends of $2.7 million will accumulate in accordance with the terms of the preferred stock and, as of December 31, 2012, the total arrearage on the preferred stock was $2.7 million.

The preferred stock is convertible at any time, at the option of the holder, at an initial conversion rate of 264.5503 shares of common stock per share of preferred stock, equal to an initial conversion price of $3.78 per share. This represents a conversion premium of approximately 10%, based on the closing bid price of $3.43 per share of common stock on June 23, 2009.

On or prior to July 15, 2014, we may elect to convert some or all of the preferred stock into shares of common stock, if the closing price of our common stock has exceeded 150% of the conversion price for at least 20 of the 30 consecutive trading days ending the trading day before our notice of the conversion. If we elect to convert any preferred stock on or prior to July 15, 2014, we will also make a payment on the preferred stock, in cash or shares of common stock, equal to the aggregate amount of dividends which would have accumulated and become payable through and including July 15, 2014, less any dividends already paid on the preferred stock.

After July 15, 2014, we may elect to convert some or all of the preferred stock into shares of common stock, if the closing price of our common stock has exceeded 125% of the conversion price for at least 20 of the 30 consecutive trading days ending the trading day before our notice of the conversion. If we elect to convert any preferred stock after July 15, 2014, we will make an additional payment on the preferred stock, in cash or shares of common stock, for all accumulated and unpaid dividends to and including the conversion date.

If the holder elects to convert their shares of preferred stock in connection with a fundamental change, as defined, (such as a merger or acquisition) which occurs on or prior to July 14, 2014, we will increase the conversion rate of the preferred stock surrendered for conversion. In addition, upon a fundamental change when the stock price of the common stock is less than $3.43 per share (the closing bid price as of June 23, 2009), the holder may require us to convert some or all of the preferred stock at a conversion rate equal to the liquidation preference, plus all accumulated and unpaid dividends, divided by 97.5% of the market price of our common stock, subject to a cap on the aggregate number of shares of common stock to be issued.

Common Stock — In March 2010, we entered into an agreement to sell 2,160,000 shares of our common stock, $0.01 par value per share, to an underwriter for resale to the public at a price per share of $6.00, less an underwriting discount of $0.36 per share. We completed our offering of 2,484,000 shares (inclusive of the underwriter’s option to purchase the additional 324,000 shares to cover overallotments), bringing the total aggregate common stock sold to $14.9 million. Net proceeds from the issuance of common stock were $13.7 million, with offering and related costs totaling $1.2 million.

Stockholder Rights Plan — In February 2008, we adopted a stockholder rights plan, which was approved by the stockholders at the Annual Meeting on May 14, 2008. The rights plan is intended to maximize stockholder value by providing flexibility to the Board of Directors in the event an offer for LodgeNet is received which is either inadequate or not in the best interest of all stockholders. In connection with the investment agreement with the Colony Syndicate, in January 2013, the stockholder rights plan was amended so that the entry into the investment agreement with the Colony Syndicate does not and will not trigger purchase rights under the stockholder rights plan.

Warrants — In October 2010, we issued a warrant to a professional services company, granting it the right to purchase up to 25,000 shares of our common stock at a price of $3.75 per share. Proceeds from the issuance were $46,000. The warrant became exercisable on the date the professional services were delivered to us in January 2011. The warrant includes anti-dilution provisions and expires on October 15, 2013.