From The Wall Street Journal:
GateHouse Media Inc., the struggling local newspaper chain owned byFortress Investment Group LLC,is weighing a streamlined bankruptcy-protection filing to tackle more than $1 billion in debt coming due next year while it tries to negotiate a far-reaching deal with creditors, said people close to company.
The publisher of the Patriot Ledger in Quincy, Mass., and more than 300 daily and weekly newspapers has hired restructuring lawyers at Clearly, Gottlieb, Steen & Hamilton LLP to negotiate with creditors on a plan to rework the $1.2 billion debt load with an eye toward avoiding bankruptcy court, the people said. If the negotiations fail, the company could implement a debt restructuring plan through a so-called prepackaged bankruptcy later this year with some creditors agreeing ahead of time on the deal’s terms, they said.
GateHouse has begun to informally ask creditors to forgive their debt for ownership stakes in a reworked company, or accept payments of 33 cents for every dollar they are owed, the people said. Should enough creditors go along with the plan, GateHouse could avoid bankruptcy court.
GateHouse stock was delisted from the New York Stock Exchange in 2008 because of financial woes. It currently trades over the counter for about 6 cents a share.
In my humble opinion, the worst thing to happen would be for this deal to go through. Because then, the Journal Star would still be owned by GateHouse. I believe constructive destruction. Far, far better for the Journal Star to collapse and something newer and more honest to arise from the ashes.