Source InterLink files for Ch.11

[Boyd]

No doubt some titles will be axed, but which ones?


From Autoblog.com: Source Interlink, the mega-publishing firm that owns Automobile, Motor Trend, Hot Rod and dozens of other enthusiast print and web titles, filed for Chapter 11 bankruptcy protection in a Wilmington, Delaware court yesterday. According to the filing, Source Interlink has a listed debt of $1.9 billion and assets amounting to $2.4 billion, and in a statement from Greg Mays, Source's CEO said "This restructuring will materially reduce our interest expense and debt levels."



The filing comes at a time when first quarter advertising revenue in magazines has plummeted by 20% compared to last year, and the pinch began to be felt by enthusiasts late in 2008 when Source Interlink killed off Sport Compact Car and Turbo and High Tech Performance, two of the company's most respected – although recently unprofitable – titles. It's unclear how the restructuring will affect the 75 publications, 90 websites and other media outlets under the Source Interlink banner, but it's safe to assume that more titles will likely be dropped, consolidated, or otherwise restructured in the future as the company attempts to right a ship that's been sinking for the last few years.

[Steve1968LS2]

There are no plans to "axe" any titles.. it's a simple reorganization.

We're not going anyware.. now we will be a privately held company rather than a publicly held one. Here's the memo:

Today, we entered into an agreement with our lenders to reduce our debt, and provide us with additional capital. This restructuring program will significantly improve our cash flow and position us to grow our business and is great news for us all.



Our current management team will remain at the helm and are committed to this business plan. More importantly, none of our employees will lose their jobs as a result of this reorganization.



In order to permit the lenders to realign our debt with available collateral, we have filed a prepackaged reorganization through the bankruptcy court. In a prepack, the critical parties have agreed to the business plan and, as a result, the entire process takes about 30 days to complete. Source Interlink will emerge from this process as a private company with a solid balance sheet.



We intend to operate in a “business as usual” manner throughout the reorganization. Most of you will see little or no change in the way we operate. Our business partners will continue to receive the same level of service they have come to expect from Source.



Be assured that we will do all we can to keep you fully informed of developments relating to our reorganization process. Later today you will receive instructions on connecting to the web cast and get important contact information in the event you have questions during the reorganization period.



On behalf of our entire management team, I’d like to thank you for your continued support.

[James OLC]

That's great news Steve!

[Damon777]

Having worked for a company that went through chapter 11, I can say it really is no big deal for employees. Suppliers maybe, but not employees.

[Boyd]

Whew! Good to know! I subscribe to what seems like half of their publications!!