From staff and wire reports
The owner of several Northeast Ohio newspapers announced this week it plans to file for bankruptcy.
An entity called Fortress Investment Group LLC, known as an investor in troubled companies, said Wednesday it will create a newspaper and website company, New Media, through a bankruptcy filing of GateHouse Media Inc. and the recently purchased assets of another firm, Newcastle Investment Corp. GateHouse said $1.2 billion in debt would be refinanced.
GateHouse Media is the owner of daily newspapers in Canton, Massillon and Dover and the Suburbanite publications in Green and Jackson Township.
Canton Repository Interim Publisher Jim Porter declined to comment on Thursday and referred all questions about the possible restructuring deal to the newspaper’s corporate parent.
Newcastle has made “two investments in high-yielding local media companies that will be combined and spun into a new company,” Fortress Co-Chairman Wesley Edens said Wednesday.
As part of the plan, GateHouse will file what is called a prepackaged bankruptcy next week, he said. A bankruptcy filing that is termed “prepackaged” already has been given creditor support.
Newcastle, managed by New York-based Fortress, said it bought Dow Jones Local Media Group from News Corp. for $87 million. The operations, including 33 local publications, will be run by GateHouse, Newcastle said.
GateHouse’s 78 daily newspapers serve 10 million people in 21 states, according to the company’s website.
It also owns 91 advertising-only publications, 235 weekly newspapers, 350 locally focused websites and six telephone directories.
Newcastle, which owns 52 percent of GateHouse’s $1.2 billion in debt, said it entered an agreement to restructure the company by converting the debt into equity in a new company. Other creditors will have the option of converting their debt to equity or cash, Newcastle said in a statement.