Morris Publishing Group LLC plans to file for a prepackaged plan of reorganization in bankruptcy court by January 19th.
The parent company of the St. Augustine Record and The Florida Times-Union announced its new plan yesterday after the company failed to get holders of 99 percent of its existing notes to agree to an exchange offer by January 12th.
The old offer announced in October would have exchanged $100 million in new second-lien secured notes for $278.5 million in outstanding senior subordinated notes.
The new prepackaged plan will allow the company to exchange $100 million in new debt for $278.5 million in existing debt, according to Morris Publishing. The plan will first have to be accepted by Chapter 11 bankruptcy court. If confirmed, all of the existing notes plus accrued interest and unpaid interest would be canceled and the holders will receive their pro rate share of the new notes.
In the announcement, Morris Publishing stated it received “overwhelming support” of its new plan, which is “not expected to have any noticeable impact on Morris’ ongoing operations.”
The holders of about 75 percent of Morris’ existing notes, or $209 million, as well as Morris Publishing agreed to file voluntary petitions for Chapter 11 relief before or on Jan. 19. The company also solicited to existing note holders to approve the plan as bankruptcy requires at least two-thirds in amount and more than one-half of the number of holders to accept the plan.
Morris Publishing Group owns and operates 13 daily newspapers as well as nondaily newspapers, city magazines and free community publications nationwide.
Photo credits: © 2010 Historic City News photographer Kerry McGuire