Burkle firm files Chapter 11

Source Interlink, publisher of Motor Trend, Hot Rod and several dozen other titles, is seeking bankruptcy protection. The company, which has been controlled by billionaire Ron Burkle's Yucaipa Cos., listed debt of $1.9 billion and assets of $2.4 billion. This is a prepackaged bankruptcy, which means that plans for the restructured company are already in place. Under an agreement with lenders, about $1 billion of the existing debt will be canceled and about $100 million additional liquidity will be provided. The company's lenders would get all the new stock, and existing equity owners, including affiliates of Yucaipa, would get nothing for their shares. Also, the company would go private. From Bloomberg:

The company bought the automotive magazines, as well as Surfer, Lowrider, Power & Motoryacht and Snowboarder, from Primedia Inc. in August 2007 for about $1.2 billion. It also acquired Soap Opera Digest and Soap Opera Weekly. Primedia, controlled by private-equity firm Kohlberg Kravis Roberts & Co., put its magazine group up for sale to pay off debt and focus on its free auto and real estate guides. The company also sold its Channel One educational television.

The Web site shop-eat-surf.com has also posted a story on the bankruptcy. Before Source Interlink and Primedia, Motor Trend and many of the other magazines were owned by L.A.-based Petersen Publishing. Here's Motor Trend's obit of Robert Petersen, whose publishing achievements seem like a long time ago.