MediaNews Group, publisher of the Santa Cruz Sentinel and the San Jose Mercury News, has announced it plans to file Chapter 11 bankruptcy.
There are more signs that the newspaper business is straining. MediaNews Group, publisher of the Santa Cruz Sentinel and the Mercury News, has announced its plans to file Chapter 11 bankruptcy. The newspapers will not shut down, though. MediaNews Group CEO William Dean Singleton has already worked out a pre-packaged financial restructuring plan with lender to “reduce [the paper’s] debt, boost its cash flow and allow greater financial flexibility.”
The group’s current debt is estimated to stand at $930 million, held mainly by Bank of America. Singleton’s new plan would exchange debt for equity, reducing the debt to just $165, while allowing MediaNews Group to keep a 20 percent stake in the company. Singleton and company President Jody Lodovic will own all Class A shares, allowing them to select most of a new Board of Directors. Dick Scudder, who served as MediaNews’s chairman, will be promoted to “Chairman Emeritus.”
MediaNews Group owns 54 newspapers in 12 states, including the Sentinel and the Mercury News. Other prominent papers to be affected include the Denver Post, the Salt Lake Tribune and the Detroit News. Read more at the Business Journal.
