• by Erik Sass  @eriksass1, February 9, 2010

 

Another big publisher has entered bankruptcy, with Penton Media's announcement Tuesday that it is filing for Chapter 11 bankruptcy protection, having worked out a "pre-packaged" plan approved by its lenders that will forgive a portion of its debt and bring another round of investment in the company.

Penton, a business-to-business publisher -- which owns titles like Business Finance, Air Transport World, and Broadcast Engineering -- plans to exit bankruptcy sometime in March.

Although details of the pre-packaged plan weren't released, Penton did disclose that it will cut debt by about $270 million, extend the senior credit maturity date to 2014, and raise more money from investors to fund operations and improve liquidity.

In other bankruptcies, these sorts of moves have usually been accompanied by a transfer of some amount of the company's equity to creditors -- but if this is the case with Penton, it is only a minority stake. The company stated "there will be no management changes or change in control."

The last few years have seen a spate of bankruptcies or creditors taking ownership at big newspaper and magazine publishers.

In the magazine world, in August 2009 the Reader's Digest Association filed for Chapter 11 bankruptcy protection, saying it would seek to reduce its debt from about $2.2 billion to about $550 million through negotiations with creditors.

Quadrangle Capital Partners lost control of Maxim to one of its main creditors, Cerberus Capital Management, in July. In April Source Interlink, a magazine publisher and wholesaler, went private in a deal that will relieve it of about $1 billion in debt and provide $100 million to fund continuing operations, as part of a Chapter 11 reorganization plan.

On the newspaper front, in January, MediaNews Group, publisher of The Denver Post, Oakland Tribune, San Jose Mercury News, and Detroit News, entered Chapter 11 bankruptcy protection, also with a "pre-packaged" plan approved by lenders.

Tribune Co., which assumed $8.5 billion in debt to go private in 2007, was forced to declare bankruptcy in 2008. Now several groups of competing creditors are trying to wrest control of the company from Sam Zell, who engineered the deal to transform it into an employee-owned company.

February 2009 brought a bankruptcy declaration by Philadelphia Newspapers, a subsidiary of Philadelphia Media Holdings, which bought The Philadelphia Inquirer and Philadelphia Daily News from McClatchy in a $562 million deal engineered by ad and PR mogul Brian Tierney in 2006. Like Tribune, PMH's management is now battling creditors in court for control of the newspapers.

The Journal Register Co., owner of a chain of local newspapers, was handed over to creditors in early 2009.