Rusty GateHouse Media Headed Toward Pre-Packaged Bankruptcy Filing?

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Debt-ridden Fairport, N.Y.-based newspaper chain GateHouse Media Inc., which owns newspapers and shoppers in 21 states and boasts a workforce of more than 4,000, is considering filing a pre-packaged bankruptcy in response to a looming $1.2 billion debt, the Wall St. Journal reported this week.

GateHouse, which is owned by Fortress Investment Group LLC, includes in its stable of more than 300 small daily and weekly papers the (Quincy, Mass.) Patriot Ledger, Norwich (Conn.) Bulletin and Utica (N.Y.) Observer-Dispatch. The chain has enlisted Houlihan Lokey investment bank and a law firm specializing in restructuring to achieve its goal of eliminating the crushing debt, the Journal article noted.

GateHouse was delisted from the New York Stock Exchange in 2008 because of its shaky financial picture, which includes a $30 million drop in sales last year compared to 2011 figures. Fortress, a prominent creditor, bought GateHouse in 2005 for more than $500 million.