American Media Inc. — publisher of the National Enquirer and Star magazine — is near bankruptcy after missing a Dec. 1 deadline to make a $21 million interest payment on its $1.1 billion debt.
The company has retained bankruptcy lawyers, sources told the New York Post’s “Media Ink” columnist Keith Kelly.
But a bankruptcy filing may be avoided if bondholders agree to take a large stake in the company in return for reducing its debt load.
A restructuring deal would turn over 95 percent of the stock to those holding the debt, leaving the old shareholders with just 5 percent of the company.
The bondholders and bankers involved in the negotiations have until Dec. 15 to reach an agreement, according to Kelly.
AMI’s other publications include Shape, Men’s Fitness, Globe and Country Weekly. The company also owns Distribution Services Inc., the nation’s leading in-store merchandising firm.
Earlier this week the media conglomerate Tribune Co., publisher of the Chicago Tribune, Los Angeles Times and other newspapers, filed for Chapter 11 bankruptcy protection.
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