Concurrently with the bankruptcy filing, GateHouse filed and requested confirmation of a joint prepackaged plan of reorganization.
GateHouse announced on
"We have complied with and are current with all our obligations," he said, "but with the challenges facing our industry and the impending maturity of our secured debt next year, we needed to be proactive in exploring options to restructure our debt, recapitalize, and position ourselves for future growth. The prepackaged plan proposes a 'balance-sheet restructuring,' by which GateHouse will emerge from bankruptcy with much less debt on its balance sheet, but with its business operations completely intact. Upon emergence, we will be under common ownership with Local
Pursuant to its plan support agreement, GateHouse solicited votes on the plan over the past week from holders of claims under its 2007 secured credit facility and certain related interest rate swaps. The plan was accepted by the only impaired class of creditors entitled to vote on it. Specifically, 79 out of the 80 holders of secured debt entitled to vote holding an aggregate amount of
Pension, trade and all other unsecured creditors of GateHouse would not be impaired under the prepackaged plan, and their votes were not solicited. GateHouse's common stock would be canceled under the plan, and holders of secured debt would have the option of receiving a cash distribution equal to 40% of their claims, or stock in
GateHouse, which operates in 330 markets across 21 states, intends to continue to operate its business without interruption as a "debtor-in-possession" under the jurisdiction of the bankruptcy court. According to Reed, GateHouse has sufficient cash to operate during the chapter 11 process and does not need, nor does it intend to obtain, debtor-in-possession financing.
"We don't believe our customers, vendors, or employees will notice any change on our day-to-day operations as a result of the bankruptcy," he said. "From an operational standpoint, it's business as usual."
None of the information made available on the restructuring website shall be deemed to be part of this filing and the reference to such website is provided as an inactive textual reference only.
Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to various risks and uncertainties, including without limitation, statements relating to progress made by GateHouse in its integration efforts, growth in revenues and cash flow, on-line revenues, expense reduction efforts and potential acquisition and sale opportunities. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "overestimate," "underestimate," "believe," "could," "would," "project," "predict," "continue" or other similar words or expressions. Forward looking statements are based on certain assumptions or estimates, discuss future expectations, describe
future plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. GateHouse's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Although GateHouse believes that the expectations reflected in such forward looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements. Factors which could have a material adverse effect on GateHouse's operations and future prospects or which could cause events or circumstances to differ from the forward-looking statements include, but are not limited to, the condition of the economy and the credit markets generally, GateHouse's ability to maintain adequate liquidity and financing sources and an appropriate level of debt,
GateHouse's ability to maintain debt covenants, GateHouse's ability to successfully grow digital revenues and audience and consumer revenues, GateHouse's ability to successfully stabilize print revenues, the ability of GateHouse to successfully identify and develop new business ventures, GateHouse's ability to close on a timely basis upon announced or contemplated transactions, unexpected liabilities arising from any transaction or that GateHouse will not receive the expected benefits from the transaction, GateHouse's ability to generate sufficient cash flow to cover required interest and long-term obligations, the effect of GateHouse's indebtedness and long-term obligations on its liquidity, GateHouse's ability to integrate acquired assets and businesses, any increases in the price or reduction in the availability of newsprint, seasonal and other fluctuations affecting GateHouse's
revenues and operating results, any declines in circulation, GateHouse's ability to obtain additional capital on terms acceptable to it, GateHouse's ability to compete effectively in the local media industry, GateHouse's success or failure in pursuing its digital business and related initiatives and strategic realignments and undertakings, increases in health costs, GateHouse's vulnerability to economic downturns, regulatory changes or acts of nature in certain geographic areas, increases in competition for skilled personnel, a portion of GateHouse's workforce being unionized, departure of key officers, increases in market interest rates, the cost and difficulty of complying with increasing and evolving regulation, and other risks detailed from time to time in GateHouse's
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