A U.S. Bankruptcy Court judge confirmed Morris Publishing Group’s Chapter 11 reorganization plan Wednesday morning, clearing the way for Morris to emerge out of bankruptcy as soon as March 1.
Morris filed its prepackaged reorganization plan on Jan. 19 in U.S. Bankruptcy Court for the Southern District of Georgia in Augusta. Morris had expected to emerge from bankruptcy quickly because most of its bondholders approved the plan to restructure the company’s debt before it was filed.
Augusta, Ga.-based Morris is the publisher of the Log Cabin Democrat and a dozen other daily newspapers, as well as a number of non-daily newspapers and community publications. The bankruptcy filing has not impacted the operations of the company’s publications.
"We are delighted with the court’s decision today," Morris Publishing Chairman William S. Morris III said in a news release.
"Our commitment is to remain an agile and innovative market-driven newspaper company whose core mission is to gather and distribute news, support our advertisers and publish great newspapers and Web sites," he said.
The restructuring plan will reduce the company’s overall debt from $415 million to $126.5 million. That includes the exchange of $278.5 million in subordinated notes for $100 million in new notes. Holders of 93 percent of the notes approved the plan before it was filed.
Also, affiliated entities owned and controlled by the Morris family will make a capital contribution of about $85 million and a repayment of intercompany debt of about $25 million. That will result in the cancellation of about $110 million of Morris Publishing’s senior secured debt.
Morris Publishing said the restructuring will increase its profitability by reducing debt costs. The company reported a net loss of $13.2 million for the first nine months of 2009. But it said in a disclosure statement filed with the court that if the debt restructuring had already taken place, it would have recorded a net profit of $2.8 million in that period.