Today, Lee Enterprises ("Lee" or "the Company") filed for Chapter 11 bankruptcy protection in Delaware. This was anticipated per an 8K filed last week by the Company that stated:
"Pursuant to the Lee Support Agreement and the Pulitzer Support Agreement, the News Release announced, among other things, that Lee and its majority-owned subsidiaries expect to file voluntary petitions for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code on or about December 12, 2011. Lee’s interests in Tucson, AZ, and Madison, WI, are not included in the filing. The Chapter 11 filings will be made pursuant to a “prepackaged” restructuring plan with the support of Lee’s Supporting Lenders (who represent approximately 94% of the total outstanding loans) and the Supporting Noteholders (who have provided unanimous support).For those interested, the Lee Bankruptcy docket can be found here: Lee Bankruptcy Docket and the main claims agent page can be found here: Lee Claims Agent Page. As usual, we've added the docket to our bankruptcy docket page which can be found here: Distressed Debt Investing collection of bankruptcy dockets.
- $40M DIP via Deutsche Bank will roll into new revolving credit facility
- Existing holders of pre-petition credit facility will receive their $689.5M of a new first lien term loan facility and $175M of a new second lien facility (that has been backstopped by Goldman Sachs, Mutual Quest [Franklin Templeton], Monarch, Mudrick, and Blackwell Partners. The first lien facility is set to mature in December 2015, with the second lien maturing in April 2017. The pricing is L+625, with a 1.5% floor and 15% respectively (with a 5 point OID on the second lien)
- Second lien lenders will also receive 15% of the outstanding stock on a PF basis
- The "Pulitzer" noteholders will increase their coupon to 10.55% (that increase with time) and extend the maturity to 2015 and will see some debt paydown
- Existing shareholders will retain their interests (holding 85% of the company before management incentive plans).