Liquidation unlikely for struggling newspaper companies

Newspaper companies have been skipping loan payments, missing financial targets in debt agreements and accepting higher interest rates in exchange for more flexibility — and they're not even directly feeling the impact of the credit crisis yet. But don't expect massive sales or closures of newspapers any time soon, even though at least four newspaper companies overburdened with debt have been forced to confront their lenders over the past few weeks. With revenue at newspapers shrinking and few investors willing or able to buy them, lenders are loathe to force companies to liquidate assets that are plunging in value. They have few alternatives but to help newspapers stay on track with their payments and hang on until ad prospects improve — if they ever do.