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Auditor expresses doubts about Ziff Davis future

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New York--Ziff Davis Media Inc.'s independent auditor, PricewaterhouseCoopers Ltd., raised substantial doubt Wednesday about the technology publisher's ability to continue as is, citing the company's significant loss from operations and a default on its senior-credit facility.

Bondholders representing about 60% of Ziff's 12% senior subordinated notes, due 2010, agreed to a financial restructuring. But the company is still working to address a default on its bank facility before its forbearance agreement expires June 28.

According to its transitional report for April 1 to Dec. 31, 2001, filed late Tuesday with the Securities and Exchange Commission, Ziff said it doesn't believe its cash on hand along with "existing sources of cash" are enough to fund its cash needs in the next 12 months under its current capital structure.

Under the restructuring plan announced Wednesday, the company's majority owner, Willis Stein & Partners, and other existing stockholders would make an equity cash infusion of $80 million.

Ziff said that if it isn't successful in getting a restructuring, it is likely that it will be forced to seek bankruptcy protection.

--Matthew Schwartz

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