• 02
  • November
    2010

American Media will file for Chapter 11 bankruptcy protection in the next two weeks. The privately-owned company counts the National Enquirer, Star, Men's Fitness and Shape among its more than a dozen titles.

The company's president, David Pecker, said that nothing would change in the day-to-day operations at the company while they negotiated with creditors and worked to refinance debt. The company will reduce its debt through a debt-for-equity swap with bondholders. American Media is essentially owned by its bondholders at this point because they have already had several debt-for-equity swaps to reduce debt. The latest debt-for-equity swap was done last year in order to try to avoid bankruptcy.

Once the company files for bankruptcy protection, Pecker expects the refinancing to take two months. The National Enquirer has struggled to maintain readership and subscriptions through the recession and through company changes. According to the Guardian, the tabloids published by American Media have been hurt especially hard by the recession because their readership is older and blue-collar, a demographic that has been harder hit by the recession. The tabloid was nominated for a Pulitzer Prize for breaking the story about former presidential candidate John Edwards' affair and "love child."

Source:

National Enquirer owner files for bankruptcy protection (Guardian)