PR Newswire reported that MediaNews Group Inc., using the name of Affiliates Media, Inc., a holding company that had not been disclosed previously, announced it would seek protection from the federal courts from creditors, including Hearst Corp., owner of the San Francisco Chronicle.
The announcement was also made over the weekend in various newspapers under MediaNews control.
Under the so-called "prepackaged bankruptcy" filing, according to the reports, the percentage of the company controlled by William Dean Singleton, its chairman and chief executive officer, will double from 10 percent to 20 percent. However, Hearst Corp., owner of the Chronicle, will apparently lose its share in the 54-newspaper chain, along with Singleton's longtime partner, Richard Scudder, 96, of New Jersey.
Scudder was previously chairman of MediaNews. Now Singleton is both chairman and CEO, as well as CEO of the Associated Press organization.
The Wall Street Journal reported that MediaNews had been teetering for months and, according to Singleton, had been trying to rework its debt load instead of filing for Chapter 11 bankruptcy. "It was personally difficult for me," Singleton told the Journal. "I'm a ranch kid from West Texas, and we don't like the 'B word.'"
The Journal described Singleton's ability to retain control over MediaNews as "a face-saving victory in the company's restructuring."
Singleton said that once the bankruptcy is over, he plans to lead an industry-wide consolidation. Asked which newspapers or groups of newspapers might be combined, he answered: "You can look at the map."
The MediaNews chain owns most of the paid-circulation dailies in the Bay Area. Besides the Mercury News, it owns the Oakland Tribune, San Mateo County Times, Contra Costa Times, Tri-Valley Herald, Marin Independent Journal, The Argus in Fremont, The Daily Review in Hayward, and many others.
In its statement issued through PR Newswire, Affiliated Media said it has obtained the approval of its lenders for the financial restructuring of the company that will sharply reduce its debt, boost its cash flow and allow greater financial flexibility. The plan will be implemented in the near future through the "prepackaged" chapter 11 filing.
Singleton said only the holding company will restructure.