The holding company for MediaNews Group said Friday it had reached an agreement with creditors to file a streamlined bankruptcy protection filing in the near future, a move that significantly cuts its debt and leaves CEO Dean Singleton (left) in control, published reports say.MediaNews is the minority partner in the Gannett-controlled Detroit Media Partnership, which publishes the Detroit Free Press and The Detroit News. Gannett owns the Free Press; MediaNews owns the News. The filing by Affiliated Media Inc. is not expected to interrupt operations of the News or any of its other 53 papers, Singleton says. Under MediaNews's plan, senior lenders will swap debt for equity, helping reduce the company's debt load to about $165 million from about $930 million, according to The Wall Street Journal.
Stockholders are wiped out in this plan, which makes me wonder about the impact on Gannett. Crain's Detroit Business says MediaNews paid GCI $25 million in stock in August 2005 for the News, plus a 5% stake in the Detroit Media Partnership joint operating agency, which oversees business operations of the News and the Free Press. I don't know whether Gannett has already written down that $25 million in stock, or disposed of it in some other way. As I publish this, Corporate hasn't posted anything about the bankruptcy filing on its website.
Related: MediaNews's statement on its Chapter 11
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