The Minneapolis Star-Tribune is poised to exit bankruptcy by the end of September after a federal bankruptcy judge approved a reorganization plan that gives ownership of Minnesota's largest newspaper to its senior lenders.
Judge Robert Drain of U.S. Bankruptcy Court in Manhattan on Thursday approved the plan, which calls for a debt-for-equity swap. The newspaper's secured creditors, led by New York investment firm Angelo Gordon & Co, will exchange $400 million in senior secured debt for $100 million in new debt and a 95 percent stake in the new company.
The Minneapolis Star Tribune, which filed for Chapter 11 protection in January under a heavy debt load and a punishing decline in advertising revenue, is set to emerge from bankruptcy on or about September 28, a lawyer for the newspaper said.
Publisher Chris Harte will stay on until a new publisher is named.
The 14th-largest U.S. daily was sold by McClatchy Co to private equity firm Avista Capital Partners for $530 million in 2007. Avista's stake has been wiped out under the reorganization plan.
The case is In re: Star Tribune Holdings Corp, U.S. Bankruptcy Court for the Southern District of New York, No. 09-10244.