Affiliated Media wins approval of bankruptcy plan

Posted by Erina Lin on March 4, 2010 at 3:11 PM

Affiliated Media Inc. has won court approval of its restructuring plan, which will reduce its debt by about 81 percent and eliminate about US$751 million through a debt-for-equity swap, Bloomberg reported.

U.S. Bankruptcy Judge Kevin J. Carey, at a hearing Thursday in Wilmington, Delaware, approved the reorganisation plan which will provide lenders a majority of the reorganized company's equity, according to Bloomberg. The company publishes the Denver Post, San Jose Mercury News and 52 other dailies.

The company will be under chapter 11 bankruptcy protection by April 1.

As the holding company for MediaNews Group, Affiliated is headed by William Dean Singleton, who is also chairman of The Associated Press, according to ABC News.

"We knew we had a good plan going in, and it had been approved by the lenders before it was filed," said Singleton in a statement. "We are pleased that it won confirmation, and that our company is now well-positioned for the changing days ahead."

This plan will wipe out most of the company's $930 million debt and pass the ownership to a group of lenders led by Bank of America.

Singleton and Affiliated's management team are remaining, according to the Associated Press article posted on Canadian Business Online.