January 13, 2010 / 10:38 PM / 9 years ago

UPDATE 1-Morris Publishing to file prepackaged bankruptcy

NEW YORK, Jan 13 (Reuters) - U.S. newspaper publisher Morris Publishing Group [MORCOP.UL] said on Wednesday it would file a “prepackaged” bankruptcy petition by Jan. 19 after a debt exchange offer for $278.5 million in debt failed.

Morris, which publishes 13 daily newspapers including the Florida Times-Union in Jacksonville and Augusta Chronicle in Georgia, said it had “overwhelming support” from creditors for the plan which would exchange $100 million in new debt for $278.5 million in existing debt, if approved by the court.

Morris would be the latest in a string of newspaper companies that have sought bankruptcy protection in the past year, amid a downturn in advertising.

The company said it had support for the prepackaged plan from holders of 75 percent, or $209 million, of its existing debt for the plan.

Prepackaged bankruptcies have been popular in the latest bankruptcy wave as a way for companies to shorten their time in court. The cases are often less expensive and seen as less onerous than typical Chapter 11 cases because the companies have secured agreements from key creditors prior to entering the bankruptcy.

Reporting by Emily Chasan; Editing by Richard Chang

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