Morris Publishing Hires Bankruptcy Specialists
By Mark Fitzgerald
Published: January 29, 2009 10:04 AM ET
CHICAGO Morris Publishing Group -- struggling under debt and approaching a deadline to sell enough assets to pre-pay its loans -- said Thursday it had retained as financial adviser Lazard Freres & Co. LLC, the same firm that advised Tribune Co. as it filed for Chapter 11 bankruptcy protection.
In a terse press release, Morris announced the hiring as well of Neal, Gerbert & Eisenberg LLP, a law firm with a well-regarded bankruptcy practice.
"These firms will assist us in evaluating our strategic options regarding Morris Publishing's existing capital structure," Morris Publishing Chairman William S. Morris III said in a statement.
Reached at Morris Communications Co.'s Augusta, Ga., headquarters, Craig S. Mitchell, senior vice president of finance, said the company was not commenting beyond the press release.
The parent of 13 dailies, including the Augusta Chronicle and The Florida Times-Union in Jacksonville, family-owned Morris last fall negotiated a change in its credit agreements with its lenders. While many newspapers did the same thing as the credit freeze blew across the globe, the new terms for Morris are particularly demanding: It must sell off assets sufficient to repay its loans -- in full. The sales, or at least letters of intent, must be complete by March 31, and deals must be wrapped up by May 30.
Soon after, in November, Standard & Poor's Ratings Services downgraded its corporate credit rating to CCC, a junk rating that is just one notch above default.
We are concerned that the company may file for bankruptcy protection to reduce its debt outstanding," S&P said at the time.
In 207, Morris sold 14 dailies mostly in the Plains states to GateHouse Media, and the speculation at the time was that the sale was necessitated by its debt situation.
Morris has not yet reported its fourth-quarter results. For the third quarter, it lost $163.2 million.
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Mark Fitzgerald (mfitzgerald@editorandpublisher.com) is E&P's editor-at-large.
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