An attorney for the St. Louis Globe-Democrat said Thursday that owner Jeffrey Gluck has decided to reorganize the newspaper under Chapter 11 of the U.S. Bankruptcy Code.
“This will provide an opportunity for the Globe-Democrat to print daily,” attorney Barry Schermer said. “In fact, you will see a paper tomorrow that is larger in size than the previous Friday’s paper.”
A clerk in U.S. Bankruptcy Court confirmed that the Globe-Democrat had filed papers with the court Thursday, but she said they were being reviewed by a judge and declined to say what they contained.
Schermer said the action came in the form of an amended answer to an involuntary bankruptcy petition filed last summer by 14 current and former employees of the Globe-Democrat.
Gluck initially planned to fight the involuntary bankruptcy petition, Schermer said.
“He (Gluck) had to first explore all the alternatives, and he believes this affords us the best opportunity to come out ahead,” Schermer said.
Schermer said Gluck would retain control of the Globe-Democrat during the reorganization. He said the decision to file for reorganization would have no bearing on the possible sale of the newspaper to investors who announced recently that they were interested in taking it over.
The investors said on Sept. 10 that they they were obtaining a 45-day option to buy the newspaper by putting up $100,000 toward payment of employee salaries.
Schermer said Thursday’s action would freeze all outstanding debts incurred by the Globe-Democrat before Aug. 19, when the involuntary bankruptcy petition was filed.
“That debt is now frozen,” Schermer said. “Now we can meet current operating costs while we work out a plan to repay the debt.”
Schermer said he was not certain how long it would take to establish a reorganization plan.