New York-based Summit Business Media Holding, which is controlled by Chicago-based private equity firm Wind Point Partners, has filed for Chapter 11 bankruptcy protection after agreeing with creditors on a plan to eliminate $140 million of debt from its balance sheet, Reuters reported. The company publishes 16 magazines, 20 websites and 150 reference titles, Reuters said. Wind Point Partners controls 85% of the company’s equity.
(Reuters) – Summit Business Media Holding Co filed for bankruptcy protection after agreeing with most creditors on a plan to eliminate $140 million of debt from its balance sheet.
The New York-based publisher of 16 magazines, 20 websites and 150 reference titles filed for Chapter 11 protection late Tuesday with the U.S. bankruptcy court in Wilmington, Delaware. Several affiliates of the business-to-business media company also filed.
Wind Point Partners, a Chicago-based private equity firm, controls 85 percent of Summit’s equity, while management owns the remainder, the company said. Debt and general unsecured claims totaled about $252 million, the company said.
Summit is the latest media company to file for bankruptcy in recent years, joining others such as Tribune Co and B2B companies such as Penton Media Inc that were burdened by too much debt, a weakened economy and lower print advertising revenue.
Thomas Flynn, Summit’s chief operating officer and chief financial officer, in a Wednesday court filing said the company plans to convert $188.6 million of senior secured first-lien debt into $116 million of new loans, giving the creditors an 89.4 percent equity stake in a reorganized company.
Holders of second-lien debt would get most of the remaining equity, he said, and existing equity would be wiped out.
Restructuring talks with creditors lasted more than one year, and led to the conclusion that “a full balance sheet restructuring was necessary,” Flynn said.
Summit said it expects to emerge from Chapter 11 in the first half of 2011.
The case is In re: Summit Business Media Holding Co, U.S. Bankruptcy Court, District of Delaware, No. 11-10231. (Reporting by Jonathan Stempel in New York, editing by Dave Zimmerman)