Journal Register Co. Files for Chapter 11 - Again
Sometimes, one bankruptcy just isn’t enough: the Journal Register Co., which publishes The New Haven Register and The Trentonian, among other newspapers, has filed for Chapter 11 bankruptcy protection with an eye to selling the company in the near future, according to owner Digital First Media.
This is the second Chapter 11 filing for the Journal Register Co.
Its previous owners filed for bankruptcy protection in February 2009, enabling a restructuring that was complete by August of that year. In July 2011, Journal Register was acquired by Alden Global Capital, and that September, the new owners of the Journal Register Co. created a management company, Digital First Media, which also assumed control of digital properties owned by the MediaNews Group, publisher of The Denver Post, Detroit News and The Salt Lake City Tribune.
In a note to employees circulated on Wednesday, Digital First Media CEO John Paton explained that the earlier restructuring had failed to set Journal Register on a firm financial footing: “The Company exited the 2009 restructuring with approximately $225 million in debt and with a legacy cost structure, which includes leases, defined benefit pensions and other liabilities that are now unsustainable and threaten the Company’s efforts for a successful digital transformation.”
Paton added that Journal Register’s renewed difficulties stem largely from the fact that “from 2009 to 2011, Journal Register Company’s print advertising revenue declined 19% and print advertising represents more than half of the Company’s revenues.”
On the positive side, Paton said the company has already found a possible buyer, with a preliminary offer from 21st CMH Acquisition Co., a separate company affiliated with Alden Global Capital LLC.