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FAIRPORT, N.Y. – GateHouse Media Inc., the community newspaper group that publishes seven daily newspapers in Connecticut and Massachusetts and 113 weeklies in Massachusetts, filed for bankruptcy after creditors approved a plan to combine its assets with those recently purchased by Newcastle Investment Corp, Bloomberg News reported last week.
GateHouse, based in Fairport, N.Y., listed assets of $433.7 million and debt of $1.3 billion in a Chapter 11 petition filed last week in U.S. Bankruptcy Court in Wilmington, Del. Its Massachusetts papers include The Herald News of Fall River and the Taunton Daily Gazette.
“We have complied with and are current with all our obligations,” CEO Michael Reed said in a statement.
The prepackaged restructuring plan hinges on the combination of GateHouse with assets of Dow Jones Local Media Group, which Newcastle bought from News Corp. this month for $87 million.
Newcastle has made “two investments in high-yielding, local media companies that will be combined and spun into a new company,” Wesley Edens, co-chairman of Fortress, said on a conference call Sept. 4.
Dow Jones Local owns 33 publications, including Oregon’s Ashland Daily Tidings and The Cape Cod Times of Massachusetts. Its operations will be managed by GateHouse, Newcastle said in a statement.
Newcastle owns 52 percent of GateHouse’s $1.2 billion in secured debt and said it will convert the debt into equity in a new company. Other secured creditors will have the option of converting their debt into cash at 40 percent of par or stock in New Media Investment Group Inc., a new holding company that will own GateHouse and Local Media Group,
GateHouse has enough cash to operate in bankruptcy and doesn’t need or plan to obtain debtor-in-possession financing, Reed said. •