(Reuters) – The Minneapolis Star Tribune said it had filed a plan to emerge from Chapter 11 bankruptcy by autumn, in a report on its website.
The paper said it has the approval of creditors who hold about $384 million in secured debt and $96 million in unsecured obligations.
Under the proposed plan, the paper said it would emerge from Chapter 11 with $100 million in debt and would be worth $118-$144 million, including the value of its real estate.
The paper said first-lien creditors would receive new common stock and secured notes with a value of 32 cents on the dollar and would own the company upon approval of the plan.
Unsecured creditors would receive a cash distribution or new common stock and warrants in the newly reorganized company, according to the paper.
The Minneapolis Star Tribune filed for bankruptcy in January, as it struggled with a heavy debt load and a punishing decline in advertising revenue.
The paper said current owners, Avista Capital Partners and the Chris Harte Family Trust, would “be out of the ownership picture and walk away with nothing”.
Publisher Chris Harte was cited by the paper as saying he would leave the company before it emerged from bankruptcy.
A hearing is scheduled for July 29 in the U.S. Bankruptcy Court in New York, the paper said.
“This is our plan,” Harte told the paper. “We believe it will be acceptable to the majority of people [creditors] who will vote on it.”
(Reporting by Ajay Kamalakaran in Bangalore; Editing by Dan Lalor)