September 17, 2009
Star Tribune bankruptcy could end soon
A federal judge in New York approved a debt-for-equity swap that could pull the Minneapolis Star Tribune out of bankruptcy despite having no publisher.
A steering committee has yet to chose a new chief executive officer/publisher, the Star Tribune reported Thursday.Judge Robert Drain, however, approved the swap that would give creditors ownership of the 142-year-old newspaper.
Creditors agreed to swap $430 million in debt for ownership and $100 million in new debt.
The new owners include Angelo Gordon & Co., a private equity in New York, Wayzata Investment Partners, Credit Suisse and CIT Bank.
In 2007, Avista Capital Partners borrowed extensively to purchase the Star Tribune from McClatchy Co. for $530 million, the newspaper said. In recent years, advertising revenues for newspapers have plummeted as advertising dollars have been moving to the Internet.