Star Tribune emerges from bankruptcy under secured lenders' ownership

By Caroline Salls

Pittsburgh, Sept. 29 - Star Tribune Co. emerged from Chapter 11 bankruptcy Tuesday with new ownership and reduced debt, according to a company news release.

As previously reported, the company's plan of reorganization was confirmed on Sept. 17 by the U.S. Bankruptcy Court for the Southern District of New York.

Star Tribune said it is now primarily owned by its senior secured lenders, who hold roughly 95% of the stock in the reorganized company.

According to the release, the company's debt is $100 million, down from $480 million on Jan. 15, 2009.

"Symbolically and operationally, this is an important day for the Star Tribune," chairman of the board Michael T.P. Sweeney said in the release.

"It marks a fresh start with reduced debt, lower costs and new ownership. The company has moved very quickly through financial restructuring and is very well poised to be an agile competitor going forward."

As part of the reorganization, The Star Tribune Co. will become Star Tribune Media Co. LLC, according to the release.

As previously reported, treatment of creditors will include:

• Holders of administrative claims and other priority claims will recover 100% in cash;

• Holders of other secured claims will recover 100% either in cash or through reinstatement or the return of the collateral securing the claim;

• Holders of first-lien lender claims will recover 29.8% to 36.1% through a share of new class 3 common stock and new secured term notes;

• Holders of general unsecured claims will recover 0.5% to 1.3% through a share of class 4 common stock and new warrants;

• Holders of convenience claims will recover 0.9% in cash;

• Holders of interests in Star Tribune Holdings will receive no distribution; and

• Interests in Star Tribune will be reinstated.

Star Tribune is a Minneapolis-based information provider that includes the Star Tribune newspaper, StarTribune.com and other print and digital products and services. The company filed for bankruptcy on Jan. 15, 2009, and its Chapter 11 case number is 09-10245.

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