Freedom Communications Expected to File Chapter 11
IRVINE, CALIF.: Freedom Communications is expected to file for bankruptcy this week, according to The Wall Street Journal. The news outlet said Freedom has reached agreements with lenders on a debt restructuring.
Freedom is majority owned by the Hoiles family; Blackstone Group of New York and Rhode Island’s Providence Equity partners own a 40 percent stake the two acquired five years ago for around $460 million.Forbes lists J.P. Morgan Chase & Co., SunTrust Banks and Union Bank of California as holding around $770 million of Freedom’s debt. Chapter 11 would likely wipe out the family’s stake, reports said.
Freedom defaulted last fall, but reached agreements in April with senior credit facility lenders to waive certain requirements through the end of the year. The Orange County Register reported Aug. 3 that Freedom was expected to turn majority ownership over to bondholders in exchange for eliminating all or part of its debt. The Register attributed Freedom’s debt to the $2 billion deal that brought in Providence and Blackstone.
Cost-cutting measures were instituted in July when a 5 percent pay reduction was imposed across the company. In June, Scott Flanders left the company after more than three years at the helm. Board member Burl Osborne was subsequently installed and is still active as interim CEO.
Freedom owns more than 30 daily newspapers, 70 weeklies, and eight TV stations, the largest being WPEC-TV, the CBS affiliate in West Palm Beach, Fla., DMA No. 38. The company also has stations in Grand Rapids, Mich. (No. 41); Albany, N.Y. (No. 57); Chattanooga, Tenn. (No. 86); Lansing, Mich. (No. 115); Medford, Ore. (No. 140); Beaumont, Texas (No. 141).
-- Deborah D. McAdams
More on Freedom’s expected filing:
August 31, 2009: “Paper Owner Freedom Plans to File for Chapter 11,” at The Wall Street Journal
August 31, 2009: “OC Register Owner to File for Bankruptcy” from Forbes
August 3, 2009: “Bondholders May Run Freedom Communications” from the Orange County Register
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