Freedom Files for Chapter 11
IRVINE, CALIF.: Freedom Communications has filed for Chapter 11 bankruptcy. The move was expected as the privately held media company worked out an arrangement with its lenders. Freedom said yesterday it worked out an agreement with lenders to restructure its debt and consequently filed for Chapter 11 in U.S. Bankruptcy Court for the District of Delaware in Wilmington. Under deal terms, lenders will take over the company, which includes eight TV stations and around 100 newspapers. Operations of the media properties will continue normally, Freedom said.
The lenders, including J.P. Morgan Chase, SunTrust Banks and Union Bank of California, were owed around $770 million, Forbes said. The company was majority owned by the family of R.C. Hoiles. Blackstone Group and Providence Equity Partners had a 40 percent stake. All three will emerge with an equity share of about 2 percent when the company emerges from bankruptcy, The New York Timessaid. They’ll also receive warrants for up to an additional 10 percent over five years if certain financial benchmarks are hit.
Freedom said it had “sufficient cash to fund daily operations, including post-petition payments to vendors and partners, and to meet customer and employee obligations through the duration of the restructuring.”
-- Deborah D. McAdams
More from TVB on Freedom’s filing:
August 31, 2009: “Freedom Communications Expected to File Chapter 11”
Freedom defaulted last fall, but reached agreements in April with senior credit facility lenders to waive certain requirements through the end of the year.
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