GateHouse Media Inc., which owns over 400 community newspapers and hundreds of local websites, plans to restructure its $1.2 billion debt load through a prepackaged Chapter 11 bankruptcy filing, according to The Wall Street Journal.Gatehouse Media to Declare Bankruptcy

GateHouse became over-leveraged during the 2008 financial crisis, and lost more than $80 million in the past 2½ years. The company lost $14.1 million on revenue of $119.6 million for the quarter, which just ended June 30, 2013.

GateHouse reported total revenue fell 5 percent to $491 million for fiscal 2012. Digital revenue rose nearly 27 percent for the full year, though the company doesn’t break out digital revenue in dollar terms.

The media company is based in the Rochester, New York area and its 300-plus dailies and weeklies are scattered across the country in smaller markets such as Missouri and Illinois, and Massachusetts.

In Missouri, those dailies include the Mexico Ledger, Salt River Journal and St. James Leader-Journal.  In Illinois, the company owns the Marion Daily Republican, Peoria Journal Star and the Springfield State Journal-Register.

It also owns 91 advertising-only publications, 235 weekly newspapers, 350 locally focused websites and six yellow-page directories.

Gatehouse is currently owned by Fortress Investment Group LLC, a New York-based company that specializes in buying troubled businesses.

Newcastle Investment Corp. is managed by Fortress Investment Group LLC and owns 52 percent of GateHouse’s debt. Newcastle just bought the Dow Jones Local Media Group publications from News Corps for $82 million. News Corp’s local media group includes Cape Cod Times, Barnstable Patriot, Nantucket Inquirer-Mirror, Standard Times etc.  News Corp. generated $167 million in revenue in 2012 and reported $137 million in expenses.

Newscastle plans to combine the Gatehouse and Dow Jones Local to form a new publicly traded company called New Media.