NEW YORK (AdAge.com) -- By the end of the week it's likely that troubled tech publisher Ziff Davis Media will know if its financial restructuring will take the neater form of an out-of-court agreement or a prepackaged plan of a chapter 11 bankruptcy.
A company spokeswoman confirmed that discussions regarding the restructuring of its debt were ongoing but added that "we can't say now what's going to happen on Friday."
Resolution out of court will require 95% of the creditors to sign on to its proposed deal. The prepackaged chapter 11, which would require a trip to bankruptcy court and a judge's consent, needs 66.7% approval.
The company spokeswoman said the company had been in touch with the advertisers buying space in the company's titles, which include PC Magazine, about
62 cents on the dollar
Previously, Ziff Davis disclosed that bondholders of 87% of its notes have agreed to a debt restructuring that will exchange $250 million in senior subordinated notes for a combination of cash and new subordinated notes worth about 62 cents on the dollar.
In a filing with the Securities and Exchange Commission in April, the company had raised the specter of bankruptcy if it was not able to complete the debt restructuring.
Six magazine closed
Ziff Davis has been heavily impacted by the collapse in the tech sector. For the quarter ended June 30, revenue was down 30.6% to $56.8 million, and for that quarter it posted a net loss of $45.7 million. For the same quarter in 2001, the company's net loss was $49.3 million.
Since 2000, the company has ceased publishing six magazines -- Yahoo! Internet Life, Expedia Travels, Family PC, Net Economy, Interactive Week and Smart Partner -- and converted the 800,000 circulation title Smart Business into a newsletter.
CORRECTION:The original version of this story incorrectly asserted that either option of Ziff Davis' restructuring entailed an appearance in bankruptcy court.