MediaNews Holding Company Will File For Bankruptcy Protection

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Affiliated Media Inc., the holding company for MediaNews Group, plans to file for Chapter 11 bankruptcy protection.

The privately-held publisher of the Denver Post, San Jose Mercury News and St. Paul Pioneer Press noted in a statement that their newspapers would still be able to operate under their "pre-packed" plan.

But their bankruptcy protection plan has already been approved by lenders and would allow the company to emerge from bankruptcy quickly, according to the company.

"Unlike other media company reorganizations," said the company in a release, "this one does not involve the newspaper operations or have any effect on employees or vendors of the newspapers. Only the holding company will restructure."

According to the Wall Street Journal, the holding company, Affiliated Media Inc., reached an agreement with its lenders for a streamlined bankruptcy that will hand a majority of new stock to creditors, a group led by Bank of America Corp. The company's existing equity will be canceled, the holding company said.

Their current plan, according to the Los Angeles Times, will relieve company debt from $930 million to $165 million.

MediaNews Chief Executive Dean Singleton insisted earlier this year that his company was not at bankruptcy risk. According to the Wall Street Journal, the publisher's prospects brightened recently with the closure of E.W. Scripps Co.'s Rocky Mountain News, which was part of a joint-operating agreement in Denver with MediaNews' Denver Post.

The Hearst Corp., and the family of MediaNews co-founder Richard Scudder are giving up interests in MediaNews, according to a person who had knowledge of the plan but spoke on condition of anonymity because he did not want discuss the plan publicly.

Singleton and Scudder, a 1935 Princeton University graduate from New Jersey, founded MediaNews in 1985. The two bought the Gloucester County Times in New Jersey in 1983 and formed MediaNews two years later. The company now owns 54 daily newspapers, including St. Paul Pioneer Press, as well as more than 100 non-daily newspapers, Web sites, television and radio broadcasters.

Hearst and MediaNews were involved in a complicated deal to acquire The Monterey County Herald and St. Paul Pioneer Press from McClatchy Co. in 2006. Hearst invested $317.3million in MediaNews, which then bought the two newspapers and the Torrance Daily Breeze from Hearst.