Post-Dispatch Owner Lee Wins Approval of Restructuring PlanMichael Bathon
Lee Enterprises Inc., the owner of the St. Louis Post-Dispatch and 47 other daily U.S. newspapers, won court approval of a restructuring plan that spares shareholders from being wiped out and sets it on the path to exit bankruptcy by the end of the month.
At a hearing today in Wilmington, Delaware, U.S. Bankruptcy Judge Kevin Gross approved a so-called prepackaged reorganization that restructures almost $1 billion in long-term debt.
The plan is “fundamentally a restructuring of its long-term indebtedness” that didn’t attract a single vote in opposition from creditors allowed to weigh in, said Kenneth P. Kansa, a lawyer for the Davenport, Iowa-based company.
The company anticipates officially exiting bankruptcy protection on Jan. 30, Kansa said after the hearing.
Under the plan, equity holders will retain their interests in the company and won’t be wiped out as is typical in most bankruptcies, according to court papers. Unsecured creditors will be unaffected by the restructuring as well.
Lenders, owed about $855.8 million, will convert some debt into a new $689.5 million first-lien secured term loan, according to court documents. The lenders can also convert a portion of their claims into part of a new $175 million second-lien facility and 15 percent of the reorganized company’s equity. The loans would mature in 2015.
Some lenders, including Goldman Sachs Lending Partners LLC, Mutual Quest Fund, Monarch Master Funding Ltd., Mudrick Distressed Opportunity Fund Global LP and Blackwell Partners LLC, already agreed to acquire as much as $166.3 million of the second-lien loan.
The holders of about $127.6 million of so-called Pulitzer notes will get new notes with maturity extended to 2015, according to the proposal. The company said it estimates the notes will total about $126.4 million when issued.
The company’s $40 million in bankruptcy financing will be converted into a revolving exit facility under the plan.
Lee sought bankruptcy protection last month after waning demand for advertising led to a three-year decline in revenue and after an out-of-court restructuring failed, according to court papers. The company listed $1.2 billion in assets and $1.3 billion in debt.
The newspaper publisher acquired Pulitzer Inc. in 2005 to gain control of the Post-Dispatch. Founded in 1890, Lee has a daily circulation of about 1.3 million, according to court documents. In addition to the 48 daily newspapers, Lee has 300 specialty publications and interests in four other dailies.
The case is In re Lee Enterprises Inc., 11-13918, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.