The details of the plan's impact on other creditors and shareholders was not discussed. Normally, in a bankruptcy where secured creditors do not receive payment in full, non-priority general creditors other than trade creditors get nothing and existing shareholders lose their shares. The story did not discuss who would control the new entity.
It appears that the publication will continue to be open for business without interruption.
This news, combined with the earlier bankruptcy of the holding group for the Denver Post and Boulder Daily Camera (among others), and the demise of the Rocky Mountain News, means that a very large share of all of the newspapers have either liquidated or gone bankrupt in a very short period of time.
The Denver Post and Colorado Springs Gazette are the only two newspapers in the state (other than one for the Associated Press generally) with dedicated state house bureaus. Thus, it is possible that the change media control environment in the state could meaingfully impact the character of state political reporting in Colorado.
UPDATE: Editor and Publisher has more detail:
[The[ reorganization plan . . .would give key lenders ownership of the company. In exchange, the company's secured lenders, led by JPMorgan Chase, would cut the amount of debt Freedom owes them to $325 million, a nearly 60 percent reduction from $770 million.
Burl Osborne, who was named interim chief executive officer last June" [will continue to be the CEO.]. . . The new company's board would consist of Osborne and five newly appointed independent directors.
Freedom Communications Holdings Inc., which publishes The Orange County Register in California and more than two dozen other dailies and owns eight television stations, filed for bankruptcy protection in September. . . . [it will sell] the East Valley Tribune in Arizona and several other Phoenix-area publications for a base price of about $2 million to 1013 Communications LLC, an affiliate of Thirteenth Street Media. Thirteenth Street publishes the Explorer, a weekly in suburban Tucson, and the Telluride (Colo.) Daily Planet. . .
[U]nsecured creditors [who objected to an original plan that would have left the shareholders of the company with some equity] stand to recover far more than the $5 million they would have shared under the initial plan, possibly as much as $56 million. . . . The plan leaves nothing for the former family and investment firm shareholders[.] . . . vendors and suppliers with claims against Freedom would get about $5 million. Pension holders would get about $12 million, representing 70 percent of their original pensions.
Other unsecured creditors, including plaintiffs in a lawsuit brought by newspaper carriers against the Register, would be the beneficiaries of a $14.5 million trust fund, part of which would be used to fund a lawsuit in which they could recover an additional $25 million. Feinstein said the lawsuit likely would allege that certain Freedom officers and directors breached their fiduciary duties in the run-up to its bankruptcy filing. . . . Most of the creditors covered by the trust fund are newspaper carriers for the Register who reached a $28.9 million settlement last year over claims that they should have been considered employees instead of contractors. The settlement was to have been finalized in September but was interrupted by the company's bankruptcy filing.