Lee announces it will file for bankruptcy
Today Lee Enterprises announced plans to file a “pre-packaged” Chapter 11 bankruptcy to restructure part of it’s debt. Read the updated story in the Post-Dispatch here.
The Guild is working to figure out exactly what it means for the employees and what to expect next. We will update unitedmediaguild.com when we get more details.
We immediately put a call into Astrid Garcia, VP HR, Labor, Operations at The St Louis Post -Dispatch, because of the bankruptcy she is unable to immediately speak to what the impact on the Guild employees would be. But she working to get answers from Davenport on a list of questions we asked her about how the bankruptcy will effect people at the St. Louis Post-Dispatch.
When we get more information we’ll update this blog posting.
Also follow us on twitter @UMediaGuild for updates
The Guild’s Treasurer, and St. Louis Post-Dispatch Business writer Jim Gallagher had these thoughts about today’s announcement.
“Lee is filing a “pre-packaged” bankruptcy. This means that the vast majority of creditors have reached a refinancing agreement, but they need the authority of the court to force the deal on the dissenters.
Lee has two levels of debt. It says it has 94 percent of creditor agreement to the largest level of debt, and 100 percent agreement on the smaller level of debt.
Dissenters may argue that the agreement is unfair. But if what Lee says is true, they should be able to force this agreement through. The company says that should take less than 60 days.
If all goes as Lee plans, our Guild contract will survive. If Lee planned to try to change it, they would have contacted us by now. They know that an effort to change that contract through bankruptcy would push this deal well, well beyond 60 days.
The deal will have Lee paying 9 percent interest on its debt as opposed to 5 percent under the current deal. This ought to be manageable for them — they say it is — as long as revenues hold up. That, of course, is an iffy proposition.
However, the higher interest payments will keep Lee focused on cost control, which means tight budgets, possibly for years to come.”
Astrid Garcia called back and said she couldn’t give an specifics or statements on the bankruptcy. But said she hoped our questions could be answered during a 6pm news conference that Lee held. She declined to give us a phone number to dial into the press conference. Post-Dispatch reporters covering the story were able to join the press conference.
In an email exchange with Bernie Lunzer, Newspaper Guild-CWA President, on Friday evening he expressed confidence things would be alright ” it’s a “pre-packaged” bankruptcy and should leave the CBA (collective bargaining agreement) intact. We’ll want legal advice of course. I’m thinking it will be okay though.”
If we get any more information this weekend we’ll post it here. If you have any questions you can email the Guild at this address firstname.lastname@example.org and we’ll do our best to get you an answer.