American Media, publisher of The National Enquirer, is planning to file for bankruptcy protection in the next two weeks, as it seeks to convert its substantial debt to equity shares in the company.
The company said Monday that it will file a prepackaged plan that should allow it to emerge from Chapter 11 in fewer than 60 days after the filing.
American Media said it already has support of 80% of bondholders in the company, although the Boca Raton, Fla.-based company didn't disclose how much debt it has.
"Our ultimate goal when we began working with our bondholders last spring was to fix our balance sheet, which this accomplishes," CEO David Pecker told the New York Post. "So while I am satisfied that the end does justify the means in this case, it's not the action the vast majority of the bondholders or I would have preferred," Pecker said.
Under the prepackaged deal, Pecker expects all employees, vendors and other creditors will be paid in full. Bondholders, meanwhile, which together are owed about $355 million, will end up controlling 95% of the company's stock, the Post reported.
American Media, which also also publishes Men's Fitness, Shape and Star magazines, said the reorganization won't affect its staff or operations.