Gatehouse Media files for Chapter 11 bankruptcy
Lists $1.2 billion debt
By Fritz Busch
WILMINGTON, Del. – GateHouse Media, Inc., one of the nation’s largest print and online media companies that owns more than 400 U.S. newspapers, including several southern Minnesota weeklies, began voluntary chapter 11 bankruptcy proceedings Sept. 27 in Delaware.
The filing followed the Fairport, N.Y.-based firm’s September 11, 2013 announcement that it would file a pre-packaged bankruptcy plan in order to restructure $1.2 billion in debt scheduled to come due in August 2014.
Under the plan, Newcastle Investment Corp. – a real estate investment trust that owns 52 percent of GateHouse’s outstanding secured debt, will combine GateHouse’s media holdings with a number of Dow Jones Local Media publications it recently bought from News Corp.
Newcastle will issue stock in a new, publicly-traded holding company called New Media Investment Group. Holders of GateHouse secured debt could take stock in the new company or cash at 40 cents on the dollar.
Kruger Inc., a Montreal-based, pulp-and-paper producer, is listed as GateHouse’s largest unsecured creditor with a $1.2 million claim, according to Bloomberg News.
GateHouse Media owns Minnesota weekly newspapers in St. James, Sleepy Eye, Redwood Falls, Cottonwood, Wabasso and Halstad plus a daily newspaper in Crookston. The company owns 78 daily newspapers in 21 states, 91 advertising-only “shoppers,”, 235 weekly newspapers and six yellow-page directories.
Other newspaper companies that entered bankruptcy since 2008 include the Minneapolis Star Tribune and Philadelphia Newspapers LLC.
The GateHouse Media Inc. case is 13-bk-12503, U.S. Bankruptcy Court, District of Delaware (Wilmington).
The Associated Press contributed to this story.