By GateHouse Media
GateHouse Media Inc., owner of The Examiner, has filed for voluntary chapter 11 bankruptcy in the U.S. Bankruptcy Court for Delaware.
But that won't mean any changes at The Examiner.
“This is actually good news for The Examiner,” said Publisher Al Bonner. “The filing will ultimately makes us a much stronger organization and does not represent any change to our local operations. It will be business as usual for our employees, partners, vendors and contractors. We intend to pay our vendors in full under normal terms for all goods and services they provide to the Examiner. This includes goods and services provided before the September 27, 2013 filing date.” GateHouse announced on Sept. 11 that it had entered into an agreement with some secured lenders, including GateHouse affiliates, to restructure $1.2 billion of debt scheduled to come due in August 2014.
According to Michael Reed, director and chief executive officer, the bankruptcy filing for prepackaged reorganization was a strategic decision. The plan proposes a “balance-sheet restructuring” that will allow GateHouse to emerge from bankruptcy with less debt on its balance sheet, but with its business operations intact, Reed said. “Once GateHouse has emerged from bankruptcy, we will be under common ownership with Local Media Group, a company with a strong community media presence and performance that operates eight daily community newspapers and 13 weeklies,” Reed said.
Pension, trade and all other unsecured creditors of GateHouse would not be affected under the plan. GateHouse's common stock would be canceled under the plan, and holders of secured debt would have the option of receiving a cash distribution of 40 percent of their claims or stock in New Media Investment Group Inc., a new holding company that will own GateHouse and Local Media Group.
GateHouse operates in 330 markets across 21 states and has nearly two dozen publications in Missouri.
The company said it intends to continue day-to-day operations under the jurisdiction of the bankruptcy court. According to Reed, GateHouse has sufficient cash to operate during the chapter 11 process and does not need debtor-in-possession financing.