GateHouse Media announced Friday it has filed "voluntary chapter 11 bankruptcy proceedings" in Delaware and has "filed and requested confirmation of a joint prepackaged plan of reorganization." The plan "proposes a 'balance-sheet restructuring,' by which GateHouse will emerge from bankruptcy with much less debt on its balance sheet, but with its business operations completely intact," GateHouse CEO Michael Reed said in the company's announcement.
The company "listed assets of $433.7 million and debt of $1.3 billion" in its filing, Sophia Pearson and Tiffany Kary report.
Upon its exit from bankruptcy, GateHouse intends to pair with Local Media Group, the collection of U.S. newspapers News Corp sold to Fortress Investment Group, which owns GateHouse, earlier this month.
GateHouse says none of its creditors voted against the plan. Its "common stock would be canceled under the plan, and holders of secured debt would have the option of receiving a cash distribution equal to 40% of their claims, or stock in New Media Investment Group Inc., a new holding company that will own GateHouse and Local Media Group," the announcement says.
The company says it has "sufficient cash to operate during the chapter 11 process," and Reed told employees he expects the process to take "45 to 60 days."