(Updates with excerpt from petition in fourth paragraph.)
Dec. 12 (Bloomberg) -- Lee Enterprises Inc., the owner of the St. Louis Post-Dispatch and 47 other daily U.S. newspapers, filed for bankruptcy protection from creditors and plans to borrow as much as $40 million to continue operations.
In Chapter 11 documents filed today in Wilmington, Delaware, Lee listed $1.2 billion in assets and $1.3 billion in debt. Among the Davenport, Iowa-based company’s largest unsecured creditors listed in court papers were Alberta Newsprint Sales of Naperville, Illinois, and North Pacific Paper Co. of Longview, Washington, owed more than $1 million each.
Lee acquired Pulitzer Inc. in 2005 to gain control of the Post-Dispatch. In addition to the 48 daily newspapers, Lee has 300 specialty publications and interests in four other dailies. Carl Schmidt, Lee’s chief financial officer, said in a court filing that the company “has significant long-term debt.”
“A significant portion of the company’s revenue is derived from advertising,” Schmidt said. “Operating revenue in most categories decreased in 2009, 2010 and 2011.”
The company had said on Dec. 2 that it planned to file a prepackaged Chapter 11 reorganization by today to modify and extend the maturity of the remaining $138 million of first-lien notes that are due in April 2012. The notes carry a 9.05 percent interest rate.
The loan documents required unanimous approval to modify the notes. Because holders of 6 percent of the notes didn’t go along, bankruptcy would be used to complete the restructuring, Lee said in the statement.
The company is asking a judge to approve its reorganization plan, which is designed to pay all creditors in full, at a hearing in late January.
Lee has lost 69 percent of its market value this year. The shares rose 13 percent to about 77 cents on the New York Stock Exchange on Dec. 9. Under the current plan, investors will retain their stock.
The case is In re Lee Enterprises Inc., 11-13918, U.S. Bankruptcy Court, District of Delaware (Wilmington).
--With assistance from Bill Rochelle, Sarah Rabil and Krista Giovacco in New York and Phil Milford in Wilmington, Delaware. Editors: Frank Longid, Andrew Dunn
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