Orange County Register Owner Filing For Bankruptcy

August 31, 2009 · Posted by Alex

Orange County bankruptcy news from the WSJ online:

“Freedom Communications Inc., the owner of the Orange County Register, is expected to file for Chapter 11 bankruptcy protection this week, according to a published report.

The Wall Street Journal reported on its Web site Sunday that the privately held company has reached agreements with its lenders to restructure its debts. The report cited unnamed people familiar with the situation.

Robert Emmers, a spokesman for Freedom, declined to comment Sunday night on the possibility of a bankruptcy filing, but he told The Associated Press that the company is ‘continuing to work with its lenders to resolve (its) balance sheet issues.’

The Journal reported that Freedom’s lenders were expected to take control of the company while it operates under bankruptcy protection. The lenders — including J.P. Morgan Chase & Co., SunTrust Banks and Union Bank of California — hold about $770 million in debt.

Freedom was founded in the 1930s by R.C. Hoiles and is still majority owned by the Hoiles family. Besides its flagship Orange County Register, the company owns 32 daily and 77 weekly newspapers, plus several television stations.

Family members representing about one half of the Hoiles clan sold their stake in the company more than five years ago when private-equity firms Blackstone Group and Providence Equity Partners acquired a 40 percent share for about $460 million. The stake of the remaining family members likely would be wiped out by a bankruptcy filing, the Journal said.

Freedom’s Chapter 11 filing would be the latest in a long line of bankruptcy cases involving media companies that have struggled with a sharp drop in advertising revenue brought on by the growth of the Internet and compounded by a long recession.

‘Freedom has been affected by the same thing that all the media companies have been affected by: the decline of advertising, which has been accelerated by the downturn in the economy,’ Emmers said. ‘Freedom has been working really hard to realign its balance sheet with the reality of the media market today.’

The company announced last month that it would reduce pay across the board by 5 percent, and the Register has announced cost-cutting measures this year including layoffs, unpaid furloughs and salary freezes.”

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Bankruptcy Filed by Reader’s Digest

August 25, 2009 · Posted by Alex

Bankruptcy attorneys for Reader’s Digest filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code on Monday.  From the San Francisco Chronicle:

“Reader’s Digest Association Inc., publisher of the iconic general interest magazine that began gracing American homes in 1922 and now reaches a worldwide audience of 130 million, filed for Chapter 11 bankruptcy protection Monday as it faces falling print circulation in the Internet age and looming debt payments…

The publisher expects to emerge from bankruptcy protection 45 to 90 days after the filing, which was made at the U.S. Bankruptcy Court in New York.

The company piled on debt following a $1.6 billion leveraged buyout in 2007 by investors led by Ripplewood Holdings LLC, a New York private equity firm, to take Reader’s Digest private. In such a transaction, investors typically borrow heavily to acquire a company, betting that operations would generate enough cash to cover the debt payments.

But signs of trouble have since emerged. In June, Reader’s Digest magazine cut its circulation guarantee to advertisers to 5.5 million from 8 million, and lowered its frequency to 10 issues a year from 12.

In the Chapter 11 filing, the company’s senior secured lenders have committed $150 million in new debtor-in-possession financing that can be converted into exit financing once Reader’s Digest leaves bankruptcy protection.

Reader’s Digest, based in Pleasantville, N.Y., publishes 94 magazines and sells about 40 million books, music and video products each year. Reader’s Digest magazine has 50 editions worldwide, reaching readers in 78 countries.”

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Bankruptcy Judge Approves GM’s Chapter 11 Plan

July 9, 2009 · Posted by Alex

From the North County Times online:

“A bankruptcy judge has ruled that General Motors Corp. can sell the bulk of its assets to a new company, potentially clearing the way for the automaker to quickly emerge from bankruptcy protection.

U.S. Judge Robert Gerber said in his 95-page ruling late Sunday that the sale was in the best interests of both GM and its creditors, who he said would otherwise get nothing.

‘As nobody can seriously dispute, the only alternative to an immediate sale is liquidation —- a disastrous result for GM’s creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates,’ Gerber wrote in his ruling.

An appeal is expected. A Chicago law firm representing people who have sued GM in several auto accident cases filed paperwork Monday saying it would appeal to U.S. District Court in New York. The deadline to appeal is noon Thursday, after which point Gerber’s order takes effect and the sale is free to close.

Attorneys for some of GM’s bondholders, unions, consumer groups and individuals with lawsuits against the company have said their needs have been pushed aside in favor of the interests of GM and the government.”

For More Information, click here

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Chapter 11 Bankruptcy for Eddie Bauer Holdings, Inc.

June 19, 2009 · Posted by Alex

From CNN.com:

“Eddie Bauer Holdings Inc. filed for Chapter 11 bankruptcy protection Wednesday, citing an inability to pay back debt.

Eddie Bauer (EBHI) emerged from Chapter 11 bankruptcy in 2005 after being spun off from former owner Spiegel Catalog, which itself sought bankruptcy protection in 2003.

Costs from the 2005 reorganization, combined with pressure from the current recession, left the company ‘with no choice but to use this process to reduce the debt load,/ said chief executive Neil Fiske in a prepared statement.’”

Eddie Bauer has 371 stores nationwide, including in Orange County (notably, in Costa Mesa’s South Coast Plaza), and plans to keep most of the stores open during the bankruptcy process.  If a new buyer takes over, however, it’s unclear what effect that would have on store closings.

For more bankruptcy information, click here

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GM Files for Chapter 11 Bankruptcy Protection

June 1, 2009 · Posted by Alex

Prospective car buyers and GM car owners take note — GM has just filed for Chapter 11 bankruptcy protection.  The survival of Orange County GM dealerships is unclear, but will be determined over the next two or three months, which is approximately how long the restructuring is expected to take.  Orange County GM dealerships are located in: Anaheim, Buena Park, Costa Mesa, Foothill Ranch, Irvine, Laguna Niguel, Tustin, and Westminster.

From the Los Angeles Times online:

President Obama said that pushing General Motors Corp. into bankruptcy today was a painful but necessary step to revive the legendary automaker, saving thousands of jobs and avoiding another direct hit to the struggling economy.

“‘Working with my auto task force, GM and its stakeholders have produced a viable, achievable plan that will give this iconic American company a chance to rise again,’ Obama said at the White House just hours after the company filed for bankruptcy protection this morning in a Manhattan courtroom…

‘Simply loaning GM more money, instead of taking equity in the company, would have continued to saddle GM with ‘irresponsibly large debt,’ the reason the company is in its current dire position, Obama said.

‘We are acting as reluctant shareholders because that is the only way to help GM to succeed,’ he said. ‘What we are not doing, what I have no interest in doing, is run GM.’”

For More Information on this and other bankruptcy news, visit  Curtis Law Group

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