Businesses that are on the verge of going under may be able to regroup, refresh and reorganize if they have the foresight to be proactive. Just as Chapter 13 and Chapter 7 bankruptcy can often help individuals or couples get their debt under control, Chapter 11 is a business bankruptcy option that allows a business to remain in operation while reorganizing their debts. The business must be owned by a corporation, partnership or limited liability company.
One New Hampshire business recently took this proactive option. Gatehouse Media Inc., filed a Chapter 11 bankruptcy and intends to remain in operation during the process. Gatehouse operates in 21 different states, and puts out printed daily publications, as well as online media publications. It is considered one of the largest of the daily publishers in the U.S.
Gatehouse is owned by Newcastle Media and also manages Seacoast Media Group for Newcastle. On September 3, Newcastle Investments bought SMG, which is the publisher of the daily Portsmouth Herald, Seacoastonline.com and other newspapers. They also bought the Dow Jones Local Media Group, which publishes seven additional papers.
Then on September 11, Gatehouse announced that it was restructuring $1.2 billion of debt through agreements made with affiliates and secured lenders. The debt was to have had a due date of August 2014. This proposed plan basically restructures the balance sheet to put Gatehouse back in the green when the bankruptcy process is complete. The bankruptcy will leave Gatehouse debt-free under the ownership of what is now being called Local Media Group, or LMG.
This was a strategic and proactive move on the management of Gateway Media Inc. The plan going forward is to merge LMG and Gatehouse into one media company, according to investors. This will give them a strong media presence, publishing eight daily and 13 weekly newspapers.
While bankruptcy normally is not looked upon favorably, it can do a lot of good when used strategically. This business will now be on sound footage and continue growing with the economy.
seacoastonline.com, “Tips to Negotiate Your GateHouse Media Inc. files prepackaged chapter 11 bankruptcy” No author given, Sep. 27, 2013