Augusta-based Morris Publishing, which operates 13 daily newspapers, including The Augusta Chronicle, was unable to obtain nearly unanimous support for its debt swap from creditors and intends to file Chapter 11 bankruptcy before next Wednesday.
The plan of reorganization is not expected to have any noticeable impact on Morris' ongoing operations.
The Augusta Chronicle is not directly affected by this step and remains profitable despite headlines that might make some think otherwise. We continue to hire new employees, pay our bills and serve the community in new and exciting ways, said Don Bailey, Chronicle president.
In mid-December, the publishing company started an exchange of $100 million in new notes for its outstanding $278 million in old notes. The exchange offer expired Tuesday night.
For the out-of-court plan to be consummated, the company needed the support from the holders of 99 percent of the debt.
Morris Publishing previously said that it would seek a prepackaged bankruptcy if the 99 percent threshold could not be reached.
A prepackaged bankruptcy means the creditors approve the financial reorganization plan prior to filing.
If the bankruptcy court approves the plan, all of the old debt will be canceled and those creditors will receive a share of the new $100 million in debt, the company explained.