The bankrupt parent company of the Orange County Register has filed a revised reorganization plan that turns over all of the company to lenders and offers added concessions to unsecured creditors.
The latest plan is a result of a compromise by the major lenders of Irvine-based Freedom Communications Inc. and its smaller unsecured creditors, who had been seeking to submit their own rival reorganization plan.
Freedom, which runs the Register, other papers and TV stations, filed for bankruptcy in September.
The new plan now calls for turning over 100% of the company to secured lenders, leaving the founding Hoiles family and the two private equity firms with no stakes.
Freedom’s original plan called for giving descendants of founder Raymond Cyrus “R.C.” Hoiles and private equity investors a combined 2% stake with an option to buy up to 10% of the company.
In a concession to unsecured creditors, which include family members, the latest plan calls for restoring 70% of pensions and benefits for retirees.
The original plan called for the elimination of pensions.
Unsecured creditors with claims of $300 million are to split $5.5 million in payments under the plan, unchanged from before.
The revised plan also establishes a $14.5 million trust that will get the right to pursue litigation claims on Freedom’s behalf.
Like the original plan, the latest package would cut Freedom’s debt from nearly $1 billion to $325 million.
Most of the debt was incurred in a 2004 buyout by private equity firms Blackstone Group LP and Providence Equity Partners LLC that kept family members in control.
