Monday, January 12, 2009

Jan. 16 could be make or break day

Jan. 16 could determine Lee's future.

Lee hasn't been doing so well with deadlines. The last one was Dec. 29, when Lee's 10-K was to be filed with the SEC. It was filed Dec. 30. That report included a note from the auditor that it has "substantial doubt about (Lee's) ability to continue as a going concern."

The first test will be whether the company manages to iron out a deal on the terms of a loan used to finance the buying the Pulitzer papers. Either the company will have an agreement by Friday, or it will be in default, which could then force it to file for Chapter 11 bankruptcy protection. (Tribune Co. recently filed for Chapter 11. It also has sold papers and listed property for sale. Lee hasn't sold any papers or property -- unless you count Lee Lodge.)

If the company does get a deal, then it is scheduled to repay $306 million in April. Lee has already said it doesn't have the money.


Anonymous said...

Does anyone know what this means?

"Lee Enterprises, the publisher of the St. Louis Post-Dispatch, received an amendment on its credit facility, which will cancel a $500 million term loan and reduce its revolver to $375 million from $475 million in exchange for looser leverage covenants." (There's more.)

Also, a retired bank president told me that Chapter 7 seems more likely for Lee than Chapter 11, as they've just got the one mammoth and unmanageable debt to contend with.

He said a court would evaluate the debt situation, and if the chasm between where Lee is and where it needs to be to restructure is just too wide, it's Chapter 7 and lights out.

Anonymous said...

Define "Lights Out".