$1 billion sale ends Canwest newspaper bankruptcy

A $1 billion deal selling the Canwest chain of newspapers closed the bankruptcy chapter in the chain's history yesterday, putting former tabloid mogul and National Post publisher Paul Godfrey at the helm of the largest English newspaper chain in Canada.

A committee of holders of senior subordinated notes led by Godfrey have a 45 percent equity stake in the newly-minted Postmedia Network Canada.

The chain, born in 1904 when William Southam created Southam Inc. after buying The Hamilton Spectator, The Calgary Herald, The Edmonton Journal, The Ottawa Citizen and The Vancouver Province, among others, eventually included the majority of Canada's large metro dailies, including The Montreal Gazette. Southam sold the chain in 1996 for 2.1 billion to Conrad Black's Hollinger International, which also acquired many of the Canadian print holdings of Thomson Newspapers.

Hollinger sold the papers and the Southam Newspapers name to Canwest in 2000, which had an eye on integrating the small market papers with its Global TV holdings. That never happened.

Struggling with a massive debt load after the acquisition, Canwest sold many of the small market newspapers to Torstar, Transcontinental Media and Osprey Media and created Canwest News Service in 2003 from the large market newspapers, but that only delayed bankruptcy.