David Kirkpatrick

August 17, 2009

Reader’s Digest files Chapter 11

Filed under: Business, Media — Tags: , , , , — David Kirkpatrick @ 3:09 pm

Even Reader’s Digest is driven to bankruptcy

From the link:

Reader’s Digest Association, the 87-year-old publishing company, said Monday that it plans to file for Chapter 11 bankruptcy protection to carry out a restructuring that would give lenders control of the company.

Reader’s Digest is seeking to reduce its debt load, which swelled after it was taken private in 2007 by an investor group led by Ripplewood Holdings. Reader’s Digest said in a statement Monday it had reached an agreement in principle with the majority of its senior lenders to convert a “substantial portion” of its $1.6 billion in senior secured debt into equity.

“Restructuring our debt will enable us to have the financial flexibility to move ahead with our growth and transformational initiatives,” Mary Berner, the company’s chief executive, said in a statement.

In addition to its flagship title, Reader’s Digest, the company publishes magazines such as Every Day With Rachael Ray and The Family Handyman and runs Web sites including Allrepices.com.

The company did not make a $27 million interest payment due Monday on its notes, and will use a 30-day grace period to continue talks with lenders about what it called a “pre-arranged” bankruptcy filing.

June 18, 2009

Six Flags going green

Filed under: Business, et.al. — Tags: , , , , — David Kirkpatrick @ 2:04 pm

The company may be in bankruptcy court after filing Chapter 11 over the weekend, but it’s taking on new environmentally-friendly policies. 

The release (smoke screen?) from today:

SIX FLAGS LAUNCHES GREEN INITIATIVE

World’s Largest Theme Park Company Committed to Protecting the Environment

NEW YORK, June 18 /PRNewswire-FirstCall/ — Six Flags, Inc., (OTC Bulletin Board: SIXF) announced today a company-wide green initiative to reduce electricity, fuel use and waste while helping to protect the watersheds and ecosystems across theme park and water park locations.

Already undertaking several innovative efforts to improve the energy performance of park operations, Six Flags is embarking on a groundbreaking pilot program at four parks.  All vehicles and trains that operate on diesel fuel will instead be powered by used vegetable oil generated in Six Flags kitchens.  Additional proactive savings in energy consumption will be achieved through the use of LED lamps and lights throughout each park resulting in reduced indirect green house gas emissions from electricity consumption.

“Six Flags is taking aggressive steps to help protect and preserve the environment for future generations,” said Mark Shapiro, Six Flags President and CEO.  “These programs will help safeguard the planet and create lasting partnerships with the communities where we live and work.”

Six Flags is also committed to dramatic recycling and waste handling.  Collaborating with corporate partner, Coca-Cola, over 3,000 recycle bins have already been placed in all Six Flags parks.

“We envision a world where our packaging is not seen as trash, but as a valuable resource that can be re-used to produce a number of products, from new beverage containers to shirts and bags,” said John Burgess, President and CEO, Coca-Cola Recycling.  “This extensive recycling program is a great way for Six Flags guests and Team Members to help support the environment.”

  Other initiatives include:
  —  The installation of low-flow, high efficiency water fixtures
      throughout the parks
  —  The purchase of fuel efficient vehicles to replace older models
  —  The use of water saving plants and groundcover at all parks
  —  Paper recycling programs at all parks

In addition, Six Flags is launching a comprehensive review of a new solar energy strategy.  By using existing available land surrounding a number of parks, Six Flags would be able to create solar panel farms to supply the parks with clean energy and reduce the amount of electricity purchased.

About Six Flags:

Six Flags, Inc. is a publicly-traded corporation  (BULLETIN BOARD: SIXF)  headquartered in New York City and is the world’s largest regional theme park company with 20 parks across the United States, Mexico and Canada.

SIX FLAGS and all related indicia are trademarks of Six Flags Theme Parks Inc. (R), TM and (C) 2009.

Source: Six Flags, Inc.
   Web Site:  http://www.sixflags.com/

May 31, 2009

GM going Chapter 11

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 6:59 pm

Tomorrow morning.

May 11, 2009

GM closer to Chapter 11

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 3:06 pm

Looks like General Motors will be declaring bankruptcy at some point. Despite all the noise to the contrary, this is — and has been for a while — the only real solution to what is going on in the Rust Belt. If done correctly GM will reemerge much leaner and ready to do business in today’s world. It’s been playing by its own unsustainable rules since the 80s.

From the link:

To remake itself outside of court, GM must persuade bondholders to swap $27 billion in debt for 10 percent of its risky stock. On top of that, the automaker must work out deals with its union, announce factory closures, cut or sell brands and force hundreds of dealers out of business — all in three weeks.

“I just don’t see how it’s possible, given all of the pieces,” said Stephen J. Lubben, a professor at Seton Hall University School of Law who specializes in bankruptcy.

GM, which is living on $15.4 billion in federal aid, faces a June 1 government deadline to complete its restructuring plan. If it can’t finish in time, the company will follow Detroit competitor Chrysler LLC into bankruptcy protection.

Although company executives said last week they would still prefer to restructure out of court, experts say all GM is doing now is lining up majorities of stakeholders to make its court-supervised reorganization move more quickly.

“If we need to pursue bankruptcy, we will make sure that we do it in an expeditious fashion. The exact strategies I’m not getting into today, but we’ll be ready to go if that’s required,” CEO Fritz Henderson said last week.

April 29, 2009

Chrysler to file Chapter 11

Filed under: Business — Tags: , , , — David Kirkpatrick @ 11:12 pm

It’s not totally done, but looks immanent. So Chrysler wins the dubious distinction of being the first of the big three to declare bankruptcy.

From the link:

Last-minute efforts by the Treasury Department to win over recalcitrant Chrysler debtholders failed Wednesday night, setting up a near-certain bankruptcy filing by the American automaker, according to people briefed on the talks.

Barring an agreement, which looked increasingly difficult, Chrysler was expected to seek Chapter 11 protection on Thursday, most likely in New York, these people said.

Update 4/30/09 — It’s done. More on the filing here and here.

March 6, 2009

GM, pull your begging hands back …

Filed under: Business — Tags: , , , — David Kirkpatrick @ 12:29 pm

… and accept the inevitable bankruptcy. Embracing Chapter 11 right now is much better than Chapter 7 down the road. No amount of taxpayer’s money will save your ass right now.

From the link:

Well, since the first government loan was written, car sales have dropped faster than just about anybody predicted. GM sales plunged 53% in February from a year ago. And the share price has continued to fall — down 41% since New Year’s and 93% over the past 12 months.

Shrinking sales and market cap put massive pressure on GM, whose survival now hinges quite literally on checks from Uncle Sam.

Wagoner has repeatedly raised the specter of bankruptcy, arguing potential customers would shun the company for fear it might no longer back warrantees or provide replacement parts.

But some of that fear is mitigated by the fact that people are buying fewer cars from all auto manufacturers, even those seen as financially healthy.

This means that no matter how much effort GM puts into restructuring, demand for new cars is now too weak to sustain a recovery. So, if Chapter 11 is inevitable, this might be the most opportune time to undertake the kind of top-to-bottom overhaul it needs. At least the company won’t be sitting out a booming market. And it could fend off Chapter 7 liquidation.

December 9, 2008

Tribune Co. files Chapter 11

I’ve blogged on the new troubles facing the newspaper industry (and post itself is on the ailing NYT) here, and left this bit of news out of the post — Tribune Co., publisher of the Chicago Tribune and the Los Angeles Times has filed for bankruptcy protection.

Blame this problem on Sam Zell being a real estate guy (read: asshole until proven otherwise) and not a media guy. He was buying assets and not intellect. That might be the key to old media’s malaise right there.

That problem can even be traced back to the failed AOL/Time Warner merger. Everyone wanted to get into assets and not intellect. Time Warner lost its way and AOL brought hot air to the table.

Zell bought what he thought was an asset to leverage, but the reality was he bought brands and smarts. Real estate investors getting into new fields almost always blow the deal and lose money. Just look at Virgin Entertainment right now and REIT Richard Branson sold out to. That whole process is a slow-moving train wreck.

Big names in trouble here: Tribune in Chapter 11 and the New York Times has mortgaged its building for cash. I’m a huge fan of business and no fan of regulation, but something is quite rotten in Denmark, so to speak.

You’ll get no argument from me that this financial crisis is the result of something being majorly broken in our system. My money’s on high finance being a delicately balanced house of cards that became too tall and too greedy. Something of a modern-day tower of Babel in numbers.

From the second link:

Tribune Co, which owns eight major daily newspapers and several television stations, filed for Chapter 11 bankruptcy protection after collapsing under a heavy debt load just a year after real estate mogul Sam Zell took it private.

Like other big U.S. newspapers, Tribune is under pressure from declining advertising revenue and circulation as more people get news online and as companies cut their marketing budgets because of the economy.

The Tribune Co‘s financial condition is symptomatic of the ills that plague the newspaper industry,” said Jerome Reisman, a bankruptcy attorney with Reisman, Pierez & Reisman.

Tribune’s bankruptcy filing is the latest chapter in the unraveling of the leveraged buyout boom which saw many companies bought by private equity firms and other investors ending up with massive debt loads.

Zell loaded up the privately held publisher with about $8 billion in additional debt when he took the company private in a transaction largely financed by company contributions to an employee stock option plan.

March 7, 2008

Ziff Davis files Chapter 11

Filed under: Business, Media, Technology — Tags: , , , — David Kirkpatrick @ 3:19 pm

The B2B publisher filed for Chapter 11 bankruptcy protection after a losses in its subscriber base and a decline in print ads.

This is yet another example of how difficult the print side of the publishing industry has always been. Even more so now in the rapidly expanding digital age since there’s reason to segment the industry into traditional- and new-media

From the linked CFO.com article:

Ziff Davis Media Inc. filed for Chapter 11 bankruptcy, but pledged to emerge by this summer.

The indirect wholly-owned subsidiary of Ziff Davis Holdings Inc. — publisher of technology and video game magazines, including PC Magazine,— said it simultaneously reached a restructuring agreement with an ad hoc group of holders of more than 80 percent of its senior secured floating rate notes. That move substantially reduces the company’s funded indebtedness.

Under the restructuring, $225 million principal amount of senior secured indebtedness (including the senior secured notes) will be exchanged for a new $57.5 million senior secured note and at least 88.8 percent of the common stock in the reorganized company.