Summit Business Media, parent company to Credit Union Times, said this morning it filed a pre-packaged bankruptcy with an existing plan with its creditors to restructure its debt.
Summit Business Media has joined the ranks of publishers seeking to reorganize and slash debt through a voluntary Chapter 11 bankruptcy.
The reorganization plan, which received approval from 83 percent of Summit's lenders (less than 100 percent approval forced Summit to go through the courts), will cut outstanding debt obligations by half, or $135 million. Summit expects to emerge from Chapter 11 in the first half of 2011.
If the plan is approved, Summit will use its bank balances (currently more than $10 million in cash) and cash flow from its existing operations to meet working capital needs. The company says any pre-filing advertising, subscription and event contracts will be honored. Lenders have also agreed to offer a debt-in-possession credit facility of $5 million to support the company's additional working capital needs.