Creditors fight "wicked" plan for bankrupt Freedom (30 daily newspapers + 8 tv stations)

[UpInArms]

Source: Reuters

WILMINGTON, Del., Nov 11 (Reuters) - Creditors of bankrupt Freedom Communications Holdings Inc have launched a fight against an "immoral and wicked" reorganization plan that would turn over the Orange County Register owner to JPMorgan Chase & Co (JPM.N) and other banks.

A court-appointed committee of creditors asked the judge overseeing the bankruptcy to direct Freedom, which owns 30 daily papers and eight TV stations, to give it confidential financial information so it could draft an alternative plan.

Freedom's proposed bankruptcy plan would give secured bank lenders almost all of the reorganized company's equity and $325 million in new notes. In return, secured lenders including JPMorgan Chase & Co (JPM.N), SunTrust Banks Inc (STI.N) and Union Bank of California would forgive $770 million in debt. Union Bank is a unit of Mitsubishi UFJ Financial Group Inc (8306.T).

Under the same proposal, unsecured creditors with claims of $300 million were to split only $5 million. The unsecured creditors receive nothing if they voted against the plan.

"I think it's immoral and wicked that we didn't get more consideration than $5 million divided among all the unsecured creditors," said Alan Bell, a former Freedom chief executive and now a member of the creditor committee.

The family of R.C. Hoiles and private equity firms Blackstone Group LP (BX.N) and Providence Equity Partners, as present owners of the company, would get stock and warrants representing 12 percent of the new company under the proposed plan.

Read more: http://www.reuters.com/article/bondsNews/idUSN1137027620091111

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JP Morgan will get the media assets under this proposal - I'm not certain who is worse - Blackstone or JP Morgan - but it should be interesting to see how this works out

[naaman fletcher]

1. Well they shouldn't receive anything.

If you lose your car to your secured creditor, your credit cards are SOL on getting that value from you. This is the same thing.