Financial News and Economical Crisis

American media market continues to suffer the consequences of the strongest in the last 70 years of recession, companies, publishers, one by one pass bankruptcy, when they are under the control of its own creditors, writes The Wall Street Journal.

Last week, the holding company Affiliated Media Inc., which owns media companies MediaNews Group Inc., producing dozens of newspapers in the United States has reached agreement with creditors for a simplified procedure of bankruptcy, resulting in the existing securities will be canceled, and the majority of new securities will get a group of creditors led by Bank of America.

Under the agreement, the preferred creditor claims will be able to exchange the debt of the company into new securities. Thus Affiliated Media expects to reduce the total amount of debt with $ 930 million to $ 165 million bond holders will receive warrants to purchase new shares. According to sources who possess information about the transaction, the company was valued at $ 200 million

MediaNews owned 54 daily newspapers, as well as a number teleradioveschetelnyh companies. Bankruptcy MediaNews may become the seventh largest among U.S. media companies over the past year. Earlier, his bankruptcy has already announced Tribune, Chicago Tribune and produces Los Angeles Times, as well as Freedom Communications, which owns the daily newspaper Orange County register. Publishers Journal Register Co. and the Star Tribune as a result of bankruptcy and became the property of creditor banks.

The same fate now threatens us-magazine publisher Reader “s Digest after the court of insolvency of the city White Plains, New York State, encouraged the restructuring plad8bn Reader” s Digest Association Inc. As a result of this plan, the group preferred creditor claims, led by bank JP Morgan Chase Co., Which once lent the company about $ 1.6 billion, will receive the entire volume of the new offerings, plus another $ 300 million of new debt. In addition, Reader “s Digest Association will remain the order of $ 105 million of previous debt. Holders of bonds totaling $ 600 million will only warrants.

decision of the judge denies the rights of a large part of creditors, certain members of the group of pensioners Reader “s Digest Association, which owns about $ 80 million, so they can return only 4 cents for every dollar lent to his former employer.

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