The AOL-Time Warner deal was a disaster for investors, and Canwest's acquisition of the National Post newspaper and the former Southam newspaper chain, which had papers in Ottawa, Montreal, Vancouver, Calgary and other major Canadian cities, turned out to be toxic for Canwest.

In 2007, in a partnership with the New York-based banking giant Goldman Sachs (NYSE:GS) , Canwest acquired Alliance-Atlantis, a Canadian film production and distribution company that owned several lucrative cable television specialty channels. Within months, Canwest showed signs of collapsing under approximately 3.8 billion U.S. dollars worth of debt, much of it high-interest "junk" bonds that had consumed any profits that the company made in the past five years.

In October, the company's broadcast assets filed for creditor protection. The company's shares, which were worth about 15 U.S. dollars at the time of the newspaper deal, were delisted from the Toronto stock Exchange last fall. At that time, they traded for 10 cents.

At the beginning of this month, an Ontario court placed Canwest's newspaper assets in bankruptcy protection. Canwest is looking for a buyer for the newspaper chain, while the bankers have come up with their plan to sell shares in a company that will own them. The banks want at least 950 million U.S. dollars for the newspapers.

In an internal memo to employees of the newspaper operations sent out earlier this month, Dennis Skulsky, president and chief executive officer of CanWest's publishing division, said there is no danger the newspapers will have to close for lack of money to meet payroll and other expenses. As what he called "an additional safety measure," Canwest secured a 23-million U.S. dollar -debtor- in-possession loan.

"That's why we can say with confidence we can continue to meet our obligations to suppliers who provide goods and services after the filing date," Skulsky said.