UPI: "U.S. Newspaper Group to File Bankruptcy." The Wall Street Journal: "MediaNews Holding Company to Seek Bankruptcy Protection." The Los Angeles Times: "Affiliated Media, Parent of Daily News Owner MediaNews, to File for Bankruptcy Protection."
And the Denver Post's headline? "Pact Lets Post's Owner Cut Debt."
Notice a missing word?
Well, that term does eventually pop up in the Post piece, penned by Aldo Svaldi, but not until the third paragraph -- at which point it's slipped in as subtly as possible: "The plan will be implemented in the near future through a pre-packaged Chapter 11 bankruptcy filing." But that's shoddy work in comparison with the Affiliated Media press release on the subject, which somehow manages to avoid the word "bankruptcy" entirely.
This kind of subterfuge is sad and futile. The Post wouldn't go through such gyrations for any other firm, and the decision to do so in this case calls the assertions that follow into doubt -- which is unfortunate, because MediaNews guru Dean Singleton really does seem to have driven a deal that gives his properties the maximum opportunity for survival even as it keeps his hands on the wheel.
Of course, such denial is nothing new. In a July 1 blog entitled "A Closer Look at MediaNews Group's Debt,," we noted a report in Debtwire, an industry subscription service, hinting at the kind of agreement that's just been reached. An excerpt:
Last week, Debtwire, an industry subscriber service, published an article entitled "MediaNews Submits Restructuring Plan to Lenders On Deadline, Sources Say," which features a fascinating array of facts and figures. The piece says MediaNews submitted a "preliminary restructuring plan" to a group led by Bank of America, whose forbearance agreement runs through September 30. The proposal called for MediaNews to equitize $732 million of its $832 million credit facility "and give lenders the majority of the reorganized equity." Folks holding the firm's $450 million in subordinated bonds "would receive the remainder of the equity."Even more interesting is the following paragraph, which mentions an important conference slated for today and uses the "B" word: "MediaNews has scheduled a 1 July lender call to provide an update on the progress of the negotiations, the second source familiar said. The company is expected to implement its restructuring through a pre-arranged or pre-packaged bankruptcy filing, said the first source, a lender and a sellside analyst."
MediaNews' reaction? Later that day, the firm issued a press release disputing all the Debtwire piece's assertions. It reads:
A media report on Wednesday, citing rumors from unnamed sources, reports that MediaNews Group has proposed a refinancing plan to its bank lenders that would cause a change in control of the company and possibly involve a bankruptcy filing.The story is inaccurate in almost all respects. As previously reported, MNG is in discussions with its bank lenders to restructure its balance sheet, including an exchange of some of its bank debt for equity in the company.
Proposals to the company's lenders do not include a change in control of the company, nor do they include proposals for any bankruptcy filings, as the rumors suggest.
MediaNews Group remains in compliance with its bank agreements while refinancing discussions continue.
Obviously, things have changed since then. Bank of America is indeed involved; its group will appoint "three of the company's seven board seats," the Post article notes. Moreover, the equity stake in the firm held by Singleton and right-hand man Jody Lodovic shrinks to 20 percent, from a high of 45 percent -- and as Singleton concedes, "Current shareholders will be losing the value of their holdings."
However, Singleton retains control of the company -- always his most important goal -- and the agreement excludes media properties like the Post and the Boulder Daily Camera, at which layoffs aren't anticipated in the immediate future.
The Post should have trusted its readers to understand these facts and put them into perspective. Instead, it treated them like children too naive to understand what's really going on. And that's as insulting as it is unnecessary -- particularly in light of all those other articles floating around that use the word "bankruptcy" up-front instead of burying it.
