Times-Union owner announces bankruptcy plan
Published: Thursday, January 14, 2010 at 11:35 a.m.
Last Modified: Thursday, January 14, 2010 at 11:35 a.m.
SAVANNAH, Ga. — Morris Publishing Group, owner of 13 daily newspapers including Florida Times-Union of Jacksonville, The Augusta Chronicle and Savannah Morning News, said Wednesday it plans to file for Chapter 11 bankruptcy protection within a week.
The Augusta-based company said in a news release it would file a "prepackaged" plan, preapproved by a majority of its creditors, in federal bankruptcy court by Tuesday. The plan seeks to slash Morris Publishing's debt of $415 million by nearly 70 percent.
"We're pleased that so many of our noteholders agreed to support this move to get Morris Publishing on more solid financial ground," said Sandra Sternberg, a spokeswoman for the company.
As newspaper profits have dwindled industrywide from the economic recession, on top of readers lost to online media, privately owned Morris Publishing has been saddled with debt mostly accumulated from its acquisition of newspapers in the 1990s.
With advertising revenues shrinking, the company has been unable to pay $19.4 million in interest on unsecured bond debt of $278.5 million that was due in two semiannual payments in February and August last year.
Morris Publishing says it will ask a bankruptcy judge to approve a bond exchange that would trade the company's existing unsecured debt for $100 million in new bonds — erasing $178.5 million owed to creditors.
The company has worked since October to get creditors to support the restructuring plan, but failed by the deadline earlier this week to get the near-unanimous approval required to settle its debt out of court.
The company says it plans to further reduce its debt, after the bond exchange is approved, by paying back $110 million of $136 million in debt owed to banks using funds generated by the company's sale of a majority stake in its billboard advertising business in October.
The company's creditors include JPMorgan Chase Bank, Bank of New York, SunTrust Bank, Wachovia Bank, Bank of America, General Electric Capital Corporation, Allied Irish Banks, RBS Citizens, Comerica Bank, First Tennessee Bank, Webster Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Corporate Bank.
Morris Publishing is a former subsidiary of Morris Communications LLC. A reorganization in January 2009 left Morris Communications as an affiliate of Morris Publishing Group, but no longer its parent company.
The Morris newspaper chain started in the 1940s when William S. Morris Jr. purchased The Augusta Chronicle, where he began working as a bookkeeper in 1929. His grandson, William S. Morris IV, is Morris Publishing's CEO.
The company has newspapers in eight states — Alaska, Arkansas, Florida, Georgia, Kansas, Minnesota, South Carolina and Texas — as well as more than 60 non-daily newspapers and magazines. The Florida Times-Union is the company's largest newspaper, followed by The Augusta Chronicle and the Savannah Morning News.
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