After reaching an agreement with creditors on a plan to eradicate $140 million of the company's outstanding debt, Summit Business Media Holding Co. filed for bankruptcy protection this week.
The company, which publishes a number of magazines and websites, including The National Underwriter insurance publication, filed voluntarily for Chapter 11 protection in a U.S. bankruptcy court in Wilmington, Delaware. However, the company says it could emerge from its restructuring in the first half of 2011.
"Summit Business Media is a fundamentally sound and profitable company," said Andrew Goodenough, president and chief executive officer. "We believe that Summit is well-positioned to take advantage of economic growth coming out of this unusually deep downturn as the industries we serve rebound.
"??During its reorganization, the company plans to convert nearly $190 million worth of first-lien debt into $116 million in new loans, the news source says. Summit also plans to give its creditors a majority equity stake in the new company. Investors who hold second-lien debt would then be given the remaining equity.
In recent years, a number of magazine publishers, including most notably Tribune Co., which publishes the Chicago Tribune and Los Angeles Times, have faced financial difficulties as the print industry continues to deal with declining revenues and a shift towards online media.