As expected, National Enquirer publisher American Media Inc. has filed its “pre-packaged” plan for Chapter 11 bankruptcy protection.
The plan was filed in the U.S. Bankruptcy Court in the Southern District of New York late Wednesday.
The company — which also publishes Star and Shape magazines — says it expects to emerge from the process within 60 days.
"Our ultimate goal when we began working with our bondholders last spring was to fix our balance sheet, which this accomplishes,” AMI publisher David Pecker told the New York Post earlier this month. “So while I am satisfied that the end does justify the means in this case, it's not the action the vast majority of the bondholders or I would have preferred."
Apparently one of AMI’s bondholders pushed for bankruptcy, despite Pecker’s plans for a debt-for-equity swap. But even under the forthcoming bankruptcy plan, the bondholders — including Avenue Capital Management, Angelo Gordon & Co. and Capital Research — will own 95 percent of the company.
In February 2009, AMI was able to cut its then $1.1 billion debt down to about $855 million.
Unrelated to the bankruptcy filing, but worth noting: Shape editor-in-chief Valerie Latona, who was criticized for putting "husband-stealer" country singer LeAnn Rimes the magazine's October cover, is out after five years at the helm.
After the issue came out, Latona admitted in a note to 40 disgruntled readers that putting Rimes on the cover was "a terrible mistake."
