Ziff Davis files for Chapter 11 bankruptcy.

Ziff Davis Media (New York), an indirect wholly-owned subsidiary of Ziff Davis Holdings, has filed for Chapter 11 bankruptcy and will implement a restructuring plan that will reduce the company's indebtedness and enable it to reorganize business and continue regular operations this summer.

As part of the restructuring, $225 million of principal debt will be exchanged for $57.5 million in new secured notes and at least 88.8% of the common stock of the reorganized company. The restructuring provides for 11.2% of the common stock to be distributed to holders of the company's current unsecured notes if such holders accept the restructuring. While those note holders have not agreed to the plan, Ziff Davis believes that it can be approved by the Court without the their approval.

Payments on the interest for the company's ongoing debt are especially burdensome and have recently approached the equivalent of 75% of Ziff's total annual revenue. In 2006, the last year for full figures, Ziff Davis Holdings had revenues of $181 million, down 3.5% from the $187.6 million received in 2005. The company had a net loss in 2006 of $133.7 million, including interest payments of $126.8 million, compared to a loss of $118.1 million in 2005, including interest payments of $110.7 million.

For the first six months of 2007, Ziff Davis had revenues of $33.3 million, a decline of 28.7% from the $46.7 million reported in the first half of 2006. The company had a net loss in the period of $77.5 million, including $70 million in interest expense, compared to a net loss of $66.5 million in the first six months of 2006, including interest expenses of $60.9 million.

Ziff Davis Media print periodicals include "PC Magazine" and the consumer titles "EGM" and "Games for Windows," while the company also produces the Digital Life Convention and Electronic Gaming Summit, related consumer and b2b online sites and research reports.