Bankruptcy

Printing Trouble

By J. Michael McBride

Two stories today about troubles in the newspaper business. First, the venerable New York Times has had to mortgage its new building, which was completed last year. (Finished just at the top of the market it would appear.) “The New York Times Company plans to borrow up to $225 million against its mid-Manhattan headquarters building, to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits…. The Times Company owns 58 percent of the 52-story, 1.5 million-square-foot tower on Eighth Avenue, which was designed by the architect Renzo Piano, and completed last year. The developer Forest City Ratner owns the rest of the building. The Times Company's portion of the building is not currently mortgaged, and some investors have complained that the company has too much of its capital tied up in that real estate.”

Here is a link to that story:
http://www.iht.com/articles/2008/12/08/business/08times.php

Second, the Tribune Company, which owns the Chicago Tribune and the Los Angeles Times and the Chicago Cubs has filed for bankruptcy protection in an effort to work out its massive debt. “Media conglomerate Tribune Co. filed for bankruptcy protection Monday, as the owner of the Chicago Tribune, the Los Angeles Times, the Chicago Cubs and other properties tries to deal with $13 billion in debt.

Advertising revenue declined severely this year because of the recession, putting pressure on the Chicago-based company. Most of its debt comes from the complex transaction in which the company was taken private, with employee ownership, by real estate mogul Sam Zell last year.

Although the next major principal payment on the debt, of $593 million, isn't due until June, analysts say Tribune has been in danger of missing lender-imposed financial targets at year's end. Those targets are based on the level of debt relative to cash flow and become harder to meet as revenue declines, even if the debt itself doesn't increase.

Monday's filing, made in bankruptcy court in Delaware, could give Tribune time to raise cash by selling off assets in a tight credit market.”

Here is a link to that article:
http://www.breitbart.com/article.php?id=D94UN7S81&show_article=1

Michael

Full post as published by Texas Lawyer Blog on December 08, 2008 (boomark / email).