MASON CITY – Lee Enterprises, owner of the Globe Gazette in Mason City, has announced that they are preparing a pre-packaged chapter 11 bankruptcy.
Multiple news sources are reporting the bankruptcy filing.
According to the Wall Street Journal, “In a prepackaged bankruptcy, a company files a plan with support of substantially all of its creditors, in hopes of a swift run through Chapter 11.”
Lee, in a news release, claims that the bankruptcy filing “preserves interests of our current stockholders and all other parties.”
The company also claims in their news release that during their bankruptcy filing “business continues as usual with no impact on employees, vendors and customers.”
“This is welcome news for all who have a stake in Lee,” said Mary Junck, Lee chairman and chief executive officer.
The news release also stated that “this news release contains information that may be deemed forward-looking that is based largely on our current expectations, and is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those anticipated.”
Lee expects their bankruptcy filing to help them restructure their massive debt. According to Marketwatch.com, “The first lien debt consists of a term loan of $689.5 million, as well as a new $40 million revolving credit facility that is not expected to be drawn at closing, both of which mature in December 2015. The second lien debt consists of a $175 million term loan maturing in April 2017.”
Lee is also facing de-listing of their stock from the New York Stock Exchange (NYSE). Lee stock (LEE) recently hit a 52-week low of 49 cents per share.
According to 4-traders.com, the NYSE “announced (Friday) that it will continue to review and monitor the continued listing status of the common stock of Lee Enterprises. NYSE Regulation will continue to closely monitor events at the Company and the appropriateness of continued listing of the Company’s securities.”
4-traders.com also reported that “The Company was previously notified that it is below compliance in that its total market capitalization was less than $50 million over a 30 trading day period and its last reported stockholders’ equity was less than $50 million, as well as that its minimum average share price was below $1.00 over a 30 trading day period. The Company is currently operating under a previously accepted NYSE business plan subject to the NYSE’s ongoing oversight.”