American Media Inc. the parent company of world famous tabloids the National Enquirer and the Star, has filed for Chapter 11 bankruptcy in a New York court. The papers reportedly state that American Media has liabilities anywhere between $500 million and $1 billion with less than $50,000 in actual assets.

The company has stated that around 80 percent of its creditors had agreed to a plan that would effectively turn over their debt and make it equity, hopefully within the next 60 days as that is when the bankruptcy time line comes to an end.

American Media Files Bankruptcy

If American Media can pull this all off, it would be a reassurance that most newspaper and magazine media could only dream of since the consumer move to internet media. There are quite a few publishers out there that are looking at bankruptcy, but American Media seems to have found the answer to make the transition as painless as possible for both itself and its creditors.

American Media has stated that the decision to file for Chapter 11 bankruptcy will not affect its ability to continue to publish its media. In fact, there are reports that say they believe this reorganization will help.