Judge accepts USSPI's reorganization plan p. 25

By: Dorothy Giobbe A JUDGE IN U.S. Bankruptcy Court for the Northern District of Illinois, eastern division, recently confirmed acceptance of a reorganization plan for U.S. Surburban Press Inc. and its subsidiary, National Surburban Marketing Inc.
USSPI, based in Schamburg, Ill., represents over 1,000 audited surburban newspapers in the top 50 markets and targets audiences by zip code using Claritas Prizim. USSPI places national ROP advertising in the newspapers with one order/one bill.
National Surburban Marketing, a subsidiary of USSPI, places cooperative Free Standing Inserts through the network of USSPI newspapers. Also, NSM offers sampling opportunities to consumer companies through the USSPI network.
The reorganization of USSPI comes less than a year after the organization filed for bankruptcy protection under chapter 11.
According to the reorganization plan, USSPI and NSM will function as separate divisions of U.S. Surburban Press Inc.
The USSPI division will continue to place ROP advertising through its surburban newspaper network. NSM will maintain only limited involvment in the FSI business and will instead focus on product sampling through the USSPI network.
Management said that scaling back the FSI business was essential for reorganization.
"The FSI is what got us into trouble in the first place," said Tim Quinn, president of NSM. "It was doing OK, but it took so damn long to build any kind of continuity."
"We were starting to see some repeat business . . . but when the prices started to go down to $4 [per thousand] . . . it just became a terrible money drain, and that's really the reason we got into Chapter 11, because we kept supporting that FSI program," he added.
Stopping the FSI program has been a "godsend" Quinn said, because "it really did stop the bleeding and allow us to get our breath and regroup."
USSPI and NSM, with operating losses of approximately $6 million between 1989 and 1993, were heavily affected by market forces in recent years, most notably the recent FSI price war.
The final push into bankruptcy protection resulted from NSM's account payable to World Color Press. Between April and July 1993, NSM became indebted to WCP in excess of $600,000 for paper, printing and shipping costs related to NSM's insert business.
Finally, on July 27, 1993, USSPI filed for Chapter 11 bankruptcy protection.