Say good-bye to GateHouse Media and hello to New Media Investment Group.
According to the Rochester Democrat & Chronicle, a U.S. Bankruptcy Court judge on Wednesday signed off on GateHouse’s prepackaged Chapter 11 plan. That wiped out more than $1.2 billion in debt that the company was to have to repay in 2014.
The newspaper reported:
Under the terms approved Wednesday by Judge Mary F. Walrath, holders of that debt can opt either to get repaid 40 cents on the dollar or to receive shares in a new holding company that will include GateHouse.
The cashout offer is being funded by Newcastle Investment Corp., which already owns 52 percent of GateHouse’s $1.2 billion in secured debt.
Owners of GateHouse stock will see those shares canceled, but will receive shares in the holding company, called New Media Investment Group Inc.
All of this is to take effect Dec. 16.
An Internal Revenue Service objection was withdrawn after some language changes in the plan.
Gatehouse filed for Chapter 11 bankruptcy on Sept. 27. The hearing Wednesday lasted just minutes.
“Thank you all for an easy bankruptcy case,” said Walrath with the U.S. Bankruptcy Court for the District of Delaware.
New Media will control the old Dow Jones chain — recently purchased by a Newcastle affiliate — and the GateHouse properties. This new company will invest up to $1 billion in new money to purchase additional properties.
GateHouse-inspired cost-cutting is well underway at the newspapers Newcastle recently purchased. The Middletown (N.Y.) Times Herald-Record recently fired its entire photo staff.
The United Media Guild represents employees at five GateHouse newspapers, the Peoria Journal Star, the Pekin Daily Times, the State Journal-Register of Springfield, the Rockford Register Star and the Freeport Journal-Standard. The UMG recently got a three-year extension in Peoria.
We are negotiating first contracts in Springfield and Rockford. Soon we will begin negotiating a new contract in Pekin.