GateHouse Media to file Chapter 11, then form new company

GateHouse Media Inc. has filed Chapter 11 and has plans to restructure its $1.2 billion debt. The company owns hundreds of local websites and more than 400 community newspapers. Newcastle Investment Corp. owns 52 percent of the company’s debt and plans to combine GateHouse’s media group with 33 other publications it purchased from News Corp. for $87 million. It plans to form New Media, a publicly traded company created from all the operations Newcastle spun off. According to Newcastle, the newly formed company would benefit from cost cuts and digital revenue, and in over three years, it would be able to invest $1 billion to purchase more shopping publications and newspapers at a discount. The Chapter 11 bankruptcy came about after the 2008 financial crisis, when GateHouse became over leveraged. However, the past few years has revealed doubled digital revenue and a $150 million cut in costs. Although total revenue fell five percent for fiscal year 2012, digital revenue increased to almost 27 percent for the entire year. Creditors are supporting the reorganization, and they have the option of cashing their stock at 40 cents on the dollar or converting their positions to stock in GateHouse. New Media is expected… Continue reading

Chapter 13 and second mortgages

New York homeowners with more than one mortgage on their properties should be aware of of how bankruptcy laws may affect the foreclosure process. Even if a homeowner is current on a first mortgage, there could be a default under a second mortgage, and filing for bankruptcy won’t necessarily stop foreclosure by the junior lien holder. Filing for Chapter 13, however, can give a homeowner a fresh start under the right circumstances. When the amount of a homeowner’s first mortgage loan is greater than the value of the home, a Chapter 13 bankruptcy would eliminate all junior mortgages. If the property value is even a dollar more than what is owed on the first mortgage, however, any junior mortgages cannot be eliminated. . Many New York homeowners have taken out second mortgages with credit unions or similar smaller lending institutions. Credit unions often pay more attention to individual mortgages than do larger lending institutions. While a homeowner may wish to get an appraisal to determine whether the property’s value is less than the senior mortgage, a credit union will likely try to obtain an appraisal that is more favorable to its position. Falling behind on mortgage payments and the threat… Continue reading

Lehman Brothers bankruptcy still lingering

After failing to secure a government bailout or locate a buyer, Lehman Brothers Holdings Inc. filed for Chapter 11bankruptcy on Sept. 15, 2008. The $2 billion price tag for winding down the massive holdings of the New York-based investment banking firm has eclipsed the $757 million in bankruptcy costs incurred by the previous record holder Enron. While some critics feel that the fees being charged in the Lehman bankruptcy case are unusually high, a professor at the University of Illinois’ College of Law pointed out that the typical percentage paid in fees for Chapter 11 bankruptcy cases is approximately two to four percent of the assets of the company filing for bankruptcy. In the case of Lehman Brothers, the $2 billion in fees is far less than that percentage when compared to the company’s $639 billion in assets. A bankruptcy attorney also noted that highly chaotic bankruptcies are typically more expensive than less complex cases. According to the 2011 court approved liquidation plan, creditors hoping to recover some of the money that they lost as a result of their dealings with Lehman Brothers are currently scheduled to receive a payment equaling approximately 18 cents for every dollar that they are… Continue reading

Free Debt Consultation

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Associations & Memberships:
  • New York State Bar Association
  • National Association of Consumer Bankruptcy Attorneys
Rock County New York | Town of Stony Point | Town of Haverstraw | Town of Ramapo | Town of Clarkstown | Town of Orangetown