Strib: "We have the money, we're just not going to pay the interest"

The Star Tribune's Neal St. Anthony offers up the latest internal revelation from the paper: the Strib chose not to make a quarterly interest payment to its second-tier debt holders despite the fact that, according to publisher Chris Harte, they have the money.

The news is fresh, but it simply continues the existing narrative: capital "restructuring" (a whitewashing euphemism if there ever was one) is always painful. Besides, these are the creditors that hold the highest-risk debt:

George Singer, a veteran bankruptcy attorney with Lindquist & Venum who is not connected to the Star Tribune, said Avista's decision to withhold payment to the junior debt holders likely was made with the approval or encouragement of the senior lenders who would get paid first in a bankruptcy. The senior debt has traded among banks for as little as 56 cents on the dollar while the second-tier debt has traded for as little as a dime on the dollar.

The tribulations of so-called restructuring are pretty much always going to fall on the work force, something that St. Anthony's story nods at. A chunk of ugliness hidden therein:

Employment has declined from about 2,300 to 1,500 since 2000 through attrition, layoffs and buyouts.

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