GateHouse Media, Inc. is an east coast publishing company that publishes 78 daily newspapers it distributes nationwide, including in Illinois. Recently, the media company filed for Chapter 11 bankruptcy protection. A company spokesperson has indicated that the company is taking this opportunity to reorganize, restructure debt that is coming due within the next year, recapitalize and put itself in a position to grow in the coming years.
According to court documents, the company has nearly $1.3 billion in debt and assets in the neighborhood of $433.7 million. The company is reportedly up-to-date on its obligations. GateHouse also does not currently have plans to obtain debtor-in-possession financing due to the belief that it has enough cash on hand to operate during the bankruptcy.
GateHouse Media and its creditors have agreed on a prepackaged plan that will combine its assets with the assets of a recent acquisition by Newcastle Investment Corp., Dow Jones Local Media Group. GateHouse will be in charge of managing the 33 publications that Dow Jones brings to the deal. Newcastle has approved this since it owns just over half of the $1.2 billion of GateHouse’s secured debt.
GateHouse Media, Inc. decided that it would be in its best interest to file Chapter 11 bankruptcy protection. Many Illinois companies may also find that this could be the way for them to restructure their debt. As is the case with GateHouse, restructuring debt and otherwise getting a company’s affairs in order may put the company in a position to thrive once the process is complete. Many companies forget that filing for Chapter 11 bankruptcy is a viable option when a company is facing the possibility of failure.
Source: Bloomberg, GateHouse Files for Bankruptcy as Part of Fortress Plan, Sophia Pearson and Tiffany Kary, Sept. 27, 2013
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Chapter 11 aimed to reduce GateHouse Media debt