MediaNews Group, the owner of the Oakland Tribune, Contra Costa Times, and San Jose Mercury News, plans to file Chapter 11 bankruptcy soon in an effort to slash its substantial debt. The move would allow the company to lessen its debt from $930 million to $165 million, the Associated Press reports. In exchange, MediaNews debt holders would receive a majority of the equity in the company and MediaNews Chairman Dean Singleton and company president Joseph Lodovic IV would give up some control of the business, according to the Denver Post, the company’s flagship paper. However, Singleton and Lodovic will still control four of the seven votes on the company’s board of directors.
MediaNews, like many newspaper chains, has suffered advertising losses and circulation drops during the recession. But the company also has suffered under the weight of its massive debt, which it accumulated over the years while buying up other media outlets. The AP also reports that Hearst, the owners of the San Francisco Chronicle, will give up its interest in MediaNews as part of the bankruptcy restructuring plan.