American Media Inc Facing Bankruptcy, Liquidation: Already Defaulted on $413m

Here’s something to gossip about. American Media Inc., the publisher of Star magazine, The National Enquirer, Shape and Men’s Fitness has received a new extension to try to work out a deal to avoid bankruptcy or liquidation.

The company has already defaulted on $413 million in outstanding bonds.

According to a SEC filing, the new deadline is midnight, January 26.

According to the NY Post, the company warned in the filing that “given the continued weakness of the credit markets, there can be no assurance that the company can refinance its existing notes or obtain the additional capital necessary to satisfy its short-term cash needs on satisfactory terms.”

If the bondholders demand payment on that debt, “the company may have to liquidate assets on unfavorable terms or be unable to continue as a going concern and incur additional costs associated with bankruptcy.”

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The company has been cutting staff across the board, with a recent round said to total 10% of the workforce.