As expected, the owner of the OC Register filed for bankruptcy protection, creating still more confusion about where the Socal newspaper business is headed. Freedom cited debts of more than $1 billion and assets of $500 million to $1 billion. A reorganization plan will be filed within 45 days. (Reuters)
*From the Register:
"I consider this to be good news, not bad news," said Burl Osborne, Freedom's interim chief executive. "It's not about liquidation or going out of business. It allows the company to operate more effectively." Under the reorganization, Freedom's debt will be cut to $325 million from more than $770 million.
Existing shareholders, including members of the founding Hoiles family, and two private equity firms, the Blackstone Group and Providence Equity Partners, will retain a 2 percent equity interest in the company. They also will be granted warrants that will allow them to purchase up to 10 percent of the shares in the company.
However, the family, which has owned the flagship Register since 1935, and has since seen the company grow to 33 dailies, 70 weeklies and other publications, and eight television stations, will give up control to the banks. The lenders will select a new board and appoint a new CEO.