Newspaper publisher Lee to file for bankruptcy

Lee Enterprises Inc., the owner of the St. Louis Post-Dispatch and one of the largest newspaper publishers in the country, announced Friday that it will file for bankruptcy on or about Dec. 12 after efforts to work out an out-of-court refinancing deal with its lenders failed.

In a news release, Lee Enterprises, based in Davenport, Iowa, said that filing a “prepackaged” Chapter 11 bankruptcy plan would allow the company to restructure its debts and exit bankruptcy in sixty days or less.

The publisher said the bankruptcy will have no impact on its business. Vendors, advertisers, subscribers, employees and the company’s operations will not be affected.

“Everyone had hoped that Lee would get by without doing it, but it didn’t come as a big surprise,” media analyst John Morton said of Lee’s bankruptcy plans. Morton is president of Morton Research Inc., based in the Washington area.

Lee also said the bankruptcy plan won’t affect its stock listing on the New York Stock Exchange. Lee shares closed Friday at 53 cents, down 1 cent from the previous close.

Lee said earlier this year it would seek a prepackaged bankruptcy if it failed to refinance $904.5 million in debt that matures in April 2012.

Companies file prepackaged bankruptcy filings when they have agreement from most creditors, but face dissent from a smaller group. The majority then use bankruptcy proceedings to force the agreement on the dissenters.