The announcement that MediaNews Group has won a forbearance agreement from its lenders is confirmation that the chain which owns most of the dailies in the Bay Area is in default, says Martin Langeveld, a former publisher and now a consultant writing for the Nieman Journalism Lab.

Langeveld said he expects the creditors will be looking to squeeze out as much cash as they can from MNG. Instead of trying to sell off individual papers at fire sale prices, which might get the banks 10 to 20 cents on the dollar, Langeveld has come up with his own restructuring ideas, including:

• A sale of the company’s printing plants, packaged with its considerable commercial printing customer base. Some of this infrastructure is aging, but the company has built some state-of-the-art plants in recent years. These assets would be attractive to various regional printers looking to expand.

• A sale of all other real estate, perhaps with partial leasebacks. The core digital enterprise to be retained won’t need all that office space.

• A restructuring of the remaining business as a fully digital, online-first news organization operating in all of the company’s existing markets, with strategic options to expand into neighboring markets.

• A reduction of publishing schedules in all markets to one or two days per week. Most of the advertising currently spread across six or seven publishing days can be nudged into one or two editions that are profitable.

• A five-day commuter-style tabloid in selected markets like Denver, the Bay Area and Salt Lake City.

Langeveld also points out that the banks could also liquidate the existing company, lay everyone off and rehire selected employees into one of several new companies. This might also be a way of negating union contracts. Langeveld concludes that only a fundamental reinvention of the business provides any hope of saving it:

There’s a small chance that MediaNews will be bold enough to attempt this kind of radical scenario, and then there’s an even smaller chance that it would succeed. But without the attempt, the company is staring across the Bank of America’s workout table at bankers who want to get paid, and get paid soon; who are not concerned about journalism or communities or employees; who will be satisfied with 20 cents on the dollar in a simple breakup scenario if the company can offer no strategic plan to navigate its way to a higher valuation. It’s worth a shot.