Hedge Funds Newspaper
Hedge Fund Activity Growing in Newspaper Industry
Over the last year, bankrupt newspaper companies including Tribune Co., owner of the Los Angeles Times, KTLA-TV Channel 5 and other news organizations, have been overrun by a category of stealthy "distressed debt" hedge funds. These include Angelo, Gordon & Co. and Alden Global Capital, both of New York, and Oaktree Capital Management of Los Angeles.
Their basic strategy: Quietly buy up as much cheap, delinquent debt as possible and then fight it out in Bankruptcy Court for a lucrative settlement that transforms the debt into a large share of company stock.
Experts say it is unlikely that any single fund has amassed enough of a stake to take outright control of one or more publishers. But alliances of like-minded funds and big banks like JPMorgan Chase & Co., which have also received significant chunks of equity through restructurings, could give nontraditional investors like Angelo and Alden unusual clout over a wide swath of the newspaper industry. Source