By: E&P Staff A U.S. Bankruptcy Court judge approved the Minneapolis Star Tribune's reorganization plan Thursday, setting the stage for its emergence from bankruptcy next month with new owners and much less debt.
Judge Robert Drain approved the newspaper's debt-for-equity swap even though the new owners have not yet named a publisher/CEO for the new company. On Wednesday, creditors asked Drain to withhold his approval until the CEO is named.
The approval, first reported on the Star Tribune's Web site by Jennifer Bjorhus, comes nine months after the Star Tribune filed for Chapter 11 bankruptcy protection.
The paper had been owned for a little more than two years by Avista Capital Partners, an investor's group that bought it from The McClatchy Co. in a $530 million sale intended to create a tax loss for McClatchy.
Under the Star Tribune's plan, the investment banks and other investors who are the paper's top secured creditors will exchange $480 million in debt for stakes in the new owners' company. The paper's debt will be reduced to $100 million.
The new owners are led by the private equity firm Angelo Gordon & Co.. Investors include Wayzata Investment Partners, a private equity firm; CIT Bank; Credit Suisse; and an affiliate of GE Capital.
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