Freedom seeks bankruptcy protection

The company that owns The (Alton) Telegraph and dozens of other newspapers on Tuesday became the latest publisher to seek bankruptcy protection, driven into financial despair by a staggering drop in advertising revenue.

The filing by Freedom Communications Holdings Inc. was part of a prepackaged plan approved by a majority of the company's lenders.

The consensus on the proposed restructuring should minimize the haggling that can bog down bankruptcy proceedings, although the plan is still expected to take at least four months to gain court approval.

"Reaching this agreement with our lenders provides us with an orderly process to realign our balance sheet with the realities of today's media environment," said Burl Osborne, a newspaper industry veteran who became Freedom's chief executive two months ago.

Under the proposed restructuring, Osborne said the family and two investment firms that own Freedom would be left with no more than a 2 percent stake in the company. The rest of the stock would go to a group of 27 lenders owed nearly $771 million. The lenders, led by JP Morgan Chase & Co., would forgive most of that debt in return for control of the company.

Freedom, in a Chapter 11 filing made in U.S. Bankruptcy Court in Wilmington, Del., listed debts of $1.08 billion and assets with a book value of $757 million and "a market value substantially less than that amount."