Heartland Publications LLC, publisher of 50 community newspapers, has filed for bankruptcy with the expectation that it will complete financial recapitalization by early spring, RTT News reports.
Among its 20 newspapers in North Carolina, the Connecticut-based company publishes the Apex Herald, Fuquay-Varina Independent, Holly Springs Sun, Garner News and Cleveland Post in the Triangle.
The News & Observer established two newspapers in 2009 that compete with Heartland: the Southwest Wake News, covering Apex, Fuquay-Varina and Holly Springs, and the Garner-Clayton Record. They are among nine free community newspapers published in the Triangle by the McClatchy Newspapers company.
Heartland, whose newspapers are all “paid publications,” according to its Web site, has “reportedly … failed to make payment on its $161 million of first- and second-lien secured loans between December 2008 and February 2009,” RTT News says.
Heartland said “its publications will continue to operate without interruption, and all advertising and circulation agreements will continue as earlier. ‘Our readers, advertisers, and other business associates will see no change in our day-to-day operations,'” said Michael Bush, president and chief executive officer. The company says it has sufficient funds and positive cash flow to pay its ongoing expenses for the foreseeable future.
Note: The Associated Press report about Heartland posted by Editor & Publisher says the company “publishes 23 paid-circulation daily newspapers, along with several weekly and free publications.”
The AP also says, “the company’s top lender, GE Capital, has agreed to reduce what it is owed to $70 million from roughly $111 million. In exchange, the financial-services arm of the industrial conglomerate General Electric Co. would get a 90 percent stake in the company.”