NEW YORK (Reuters) - American Media Inc, publisher of the National Enquirer and Star supermarket tabloids, as well as body-toning magazines such as Men’s Fitness, filed on Wednesday for Chapter 11 bankruptcy protection.
The “prepackaged” bankruptcy is designed to allow American Media to restructure quickly and emerge from bankruptcy protection within 60 days.
American Media said it won support for its restructuring plan from holders of more than 75 percent of its bond debt and more than 70 percent of its bank debt.
It said some creditors would be paid in full, some would receive a mixture of cash and new debt and some would receive stock in a reorganized company.
Like other newspaper and magazine publishers, the company has struggled with a weakened economy as advertisers reduce spending and many readers turn to Internet alternatives as Time Warner Inc’s TMZ.com for news and information.
Chief Executive David Pecker in a statement said staffing and publication schedules will be unaffected by the bankruptcy and American Media expects to be a “stronger and healthier company” after emerging from bankruptcy.
American Media is privately held and backed by investors, including distressed debt specialist Angelo, Gordon & Co and the hedge fund Avenue Capital Management. It has offices in New York and Boca Raton, Florida.
The company and 16 affiliates sought protection from creditors with the U.S. bankruptcy court in Manhattan, court records show. Its operating unit American Media Operations Inc has more than $1 billion of liabilities, court records show.
The company also publishes titles, including Flex, Muscle & Fitness, Natural Health and Shape.
The case is In re: American Media Inc, U.S. Bankruptcy Court, Southern District of New York, No. 10-16140.
Reporting by Jonathan Stempel; additional reporting by Jennifer Saba; editing by Robert MacMillan