Real estate investment trust Newcastle Investment (NCI) announced on Friday that it's spinning off its media assets that include GateHouse Media and Local Media Group, of which it has a 100% ownership position. 

Newcastle will spin off the companies in early 2014 by distributing shares of its subsidiary New Media Investment Group, which will be a publicly traded company focused primarily on local media assets and on growing its online advertising and digital marketing businesses.

The REIT further said that GateHouse also commenced a voluntary chapter 11 bankruptcy proceedings on Friday pursuant to a prepackaged plan of reorganization for which Newcastle is acting as sponsor. As a result of the bankruptcy plans, New Media will own the reorganized GateHouse and Local Media.

The spinoff of New Media still needs to be approved by the bankruptcy court along with approvals by the SEC, acceptance by the New York Stock Exchange, and the formal declaration of the transaction by the board of directors.

Houlihan Lokey advised Newcastle's board on the spinoff's evaluation.