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Freedom Bankruptcy Moves Ahead

WILMINGTON, DEL.: The federal court handling the Freedom Communications bankruptcy has approved the company’s reorganization plan. Irvine, Calif.-based Freedom owns 90 print publications and eight TV stations. The U.S. Bankruptcy Court for the District of Delaware in Wilmington approved of Freedom’s disclosure statement last week, clearing the way for the media company to solicit votes from creditors on its debt restructuring plan. A hearing for final approval of the plan is scheduled for March 9. It has already been approved by both groups representing secured and unsecured creditors. The second group previously received court approval to submit their own plan after one proffered by the company left them with around two cents on the dollar.

Under the plan approve by the court, Freedom’s secured debt would be reduce from $770 million to $235 million, with all common stock owned by secured creditors. Unsecured creditors would get $20 million versus the $5 million they were previously offered.

Freedom filed for Chapter 11 protection Sept. 1, 2009.

More on Freedom:
December 4, 2009: “Court Allows Creditors to Pursue Alternate Reorg Plan”
Freedom’s proposed plan would have given its secured lenders control of nearly all of the reorganized company’s equity and $325 million in new notes. When Freedom filed for Chapter 11 on Sept. 1, it submitted the plan to allow J.P. Morgan Chase, SunTrust and Union Bank of California to take over the company.