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ICU TimesI parent co. files for Ch.11 bankruptcy
NEW YORK (1/28/11)--Summit Business Media, the parent company of trade newspaper Credit Union Times and 12 other business-to-business publications, announced Wednesday it was filing for a Chapter 11 reorganization in a U.S. Bankruptcy Court in Wilmington, Del. The plan has approval from 83% of its creditors and will cut outstanding debts by more than half, or roughly $135 million, which will "enhance the company's financial position," said Summit in a press release Wednesday. It expects to emerge from the restructuring during the first half of this year. The plan provides for Summit's continued normal operations during the reorganization. Subject to court approval, Summit will use its more than $10 million in cash and cash flow from its operations to meet its working capital needs during reorganization. The company said its pre-filing advertising, subscription and event contracts "will be honored in full. Summit will pay all vendors for goods and services received during the reorganization process, and Summit employees will receive uninterrupted wages and benefits." Also, its lenders agreed to provide a debtor-in-possession credit facility of $5 million to support its additional working capital needs, if any, during the process. Andrew L. Goodenough, president/CEO of Summit, noted Summit is "fundamentally sound and profitable" and "well-positioned to take advantage of economic growth coming out of this unusually deep downturn as the industries we serve rebound." Although Summit has "emerged from the downturn as a smaller but healthier company, we have too much debt to support our current business operations, left over from when Summit was a larger, acquisition-oriented company," he said. "We view this reorganization process as the last step in a two-year strategic refocusing of Summit on our core markets." Many publications' revenue come from subscription and advertising sales. Ad sales in particular took a hit for most publications during the financial downturn. Summit Business Media's 13 publications had a total of 4,109.84 ad pages from January through September in 2010--down 7.61% from 2009's 4,525.81 pages. Credit Union Times' ads were down 24.45%, the second highest drop after Senior Marketing Advisor's 33.4% decline in ad pages, according to boxscores from IMS/The Auditor data. News Now contacted Credit Union Times for a statement about the impact of the reorganization and was referred to Summit's press release.


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