AMI files for Chapter 11 bankruptcy

Bondholders and secured lenders signed the petition.

American Media Inc on Monday commenced the next phase of its previously announced restructuring by officially filing its pre-packaged Chapter 11 bankruptcy plan in the US Bankruptcy Court for the Southern District of New York.

According to the terms of the restructuring support agreement, bondholders holding more than 75 per cent of the company's bond debt and secured lenders holding more than 70 per cent of its bank debt signed the petition.

Besides, the company filed a variety of motions to continue to support its employees, customers and vendors during the financial restructuring process.

AMI also filed motions seeking permission to continue employee wage and benefits programmes; honour current customer programmes without interruption; and pay trade creditors in the ordinary course of business. The company also announced its intention not to seek debtor-in-possession financing.

The pre-packaged bankruptcy plan would "significantly de-lever" its balance sheet, the company said, adding that it expects to emerge from the process within 60 days.

"During this period of sixty days or less, there will be no impact on our employees, vendors, or advertisers, as well as our subsidiary company DSI and its customers and partners," said David Pecker, chairman, president and CEO of American Media.