After bondholder Oppenheimer Funds rejected a debt-for-equity swap, American Media opted to file for bankruptcy in order to restructure. The company, which publishes the National Enquirer, Star, and Shape, had been seeking an alternate deal for months, and all of their bondholders except Oppenheimer (which holds a roughly 15 percent stake) were onboard. Still, as the deadline for that option passed on Friday, CEO David Pecker already had on hand a bankruptcy plan. He’ll file formally within two weeks and hopes to emerge from bankruptcy within 60 days. “Our ultimate goal when we began working with our bondholders last spring was to fix our balance sheet, which this accomplishes,” he told Keith Kelly. “So while I am satisfied that the end does justify the means in this case, it’s not the action the vast majority of the bondholders or I would have preferred.” Pecker says employees and vendors will be paid 100 percent of what they are owed.
Pecker’s Package [NYP]