Idearc announced it has filed for Chapter 11 bankruptcy protection in Texas, a move that it signaled in its year-end 2008 earnings announcement, when it indicated some form of bankruptcy filing was likely if not inevitable.

Here is how Idearc describes the process it will go through:

Idearc also announced that it has reached an agreement in principle with the agent bank and a steering group of its secured lenders on certain critical elements of a plan of reorganization. The Company expects to be able to file a plan of reorganization in approximately 30 days, and if implemented as proposed, this plan will enable Idearc to significantly reduce its outstanding debt to a more suitable level upon emergence from the legal proceedings.

Idearc carries more than US$9 billion in debt, and clearing as much as possible of that debt off its balance sheet is key to the company’s survival.  

Here is Idearc CEO Scott Klein’s statement from the release:

“Today we take an important step forward as we continue to transform Idearc. Essentially we have a company with good potential being held back by a terminally ill balance sheet. We are not only open for business and serving our clients as usual, we are also continuing our focus on transforming Idearc for the future based on a bold strategy, including all of the new programs launched earlier this month.

“The reorganization process will enable Idearc to quickly finalize and implement a debt restructuring plan that will strengthen our financial condition and position us to compete more effectively in a challenging and rapidly evolving economic environment,” Klein said. “One of our most important priorities is to put in place an appropriate capital structure to support our strategic business plans and objectives. A new capital structure that can give all of our partners the confidence they need in us to be there for them in the years ahead provides us with the greatest chance for success.”

Idearc is not alone among media companies following this path today. One of my hometown newspapers, the Chicago Sun Times, filed for bankruptcy today as well, making Chicago a two bankrupt newspaper town.