NEW YORK The holding company of MediaNews Group, which publishes The Denver Post and The Salt Lake Tribune filed for bankruptcy protection on Friday, saying it has a fast-track plan to cut debt and boost cash flow.
The owner of 54 daily U.S. newspapers filed a so-called "prepackaged" Chapter 11 in U.S. bankruptcy court in Delaware, under the name of its parent, Affiliated Media Inc.
The company, which says it is the No. 2 U.S. newspaper publisher by circulation, said its restructuring would not involve its newspaper operations or "have any effect" on its employees and vendors.
It also said there would be no change in management, and that the plan to reorganize the holding company had won approval from its lenders.
The company is the latest in a string of newspaper publishers to succumb to an advertising drought that has plagued media companies. The filing by the MediaNews parent, follows Chicago Tribune publisher Tribune Co, Philadelphia Inquirer publisher Philadelphia Newspapers and Orange County Register publisher Freedom Communications Holdings Inc into bankruptcy.
Prepackaged bankruptcies have grown in popularity this year, since companies and their creditors agree on a reorganization plan prior to the filing, and have found it to be an efficient way to get companies through the court process. Companies that make prepackaged filings are often able to exit court protection in 30 to 90 days.
In its bankruptcy filing, Affiliated Media listed assets in the range of $100 million to $500 million and liabilities in the range of $500 million to $1 billion. The company also owns websites and television and radio broadcasters, and papers like The Detroit News and St. Paul Pioneer Press
Affiliated said in its bankruptcy filing that it owes the U.S. Pension Benefit Guaranty Corp more than $70 million for pension liability, making the U.S. pension protection agency one of its largest creditors.
Hearst Corp, which holds an equity stake in the company is likely to have its investment wiped out by the bankruptcy.
Affiliated Media has hired Hughes Hubbard & Reed as its bankruptcy counsel, Carl Marks Advisory Group as its restructuring advisor and Rothschild Inc as its financial advisor, according to court documents.
The case is In re: Affiliated Media Inc, U.S. Bankruptcy Court, District of Delaware, No. 10-10202.
(Reporting by Emily Chasan; editing by Carol Bishopric)