Newspaper Publisher Files for Second Bankruptcy in Three Years
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Newspaper Publisher Files for Second Bankruptcy in Three Years

September 29, 2012


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Journal Register Co., a major newspaper publisher that owns more than a dozen media properties, is filing for its second bankruptcy in three years, according to a report from The New York Times.

The company, which owns 18 newspapers in 10 different states, expects to continue its normal operations while it tries to reduce its pension obligations and other debts that threaten to derail the struggling publisher.

And while the company needs no primer on bankruptcy basics, since it filed for debt relief just two years ago, Journal Register’s portfolio of newspapers could look very different when this case is completed.

Sources indicate that Alden Global Capital, a hedge fund that bought Journal Register last year, is hoping to quickly sell a number of the publisher’s assets, which include some of its newspapers, like the New Haven Register in Connecticut, or the Oakland Press in Pontiac, Michigan.

Interestingly, an affiliate of Alden has already offered a bid to buy the company at a bankruptcy auction, which would keep the business in the Alden family. According to sources, the hedge fund, which is based in New York, has taken aggressive steps in recent years to purchase distressed newspapers.

And with the current beleaguered state of the newspaper industry, Alden has had plenty of buying opportunities. But despite filing for bankruptcy for the second time in three years, officials at Journal Register reminded reporters that they are still fighting.

Sources indicate that the newspaper group has more than doubled its online readership in the last two years, which is a somewhat promising sign. Advertising revenues, however, continue to decline, and the publisher is also hampered by its rising pension costs.

These two forces played a prominent role in forcing company executives to once again call their bankruptcy attorneys. According to an internal company memo, the company still has "approximately $225 million in debt" and a "legacy cost structure" that is "unsustainable and threaten[s] the company's efforts for a successful digital transformation."

So in its latest bankruptcy adventure, Journal Register is hoping to cut pension costs, reduce its lease obligations, and take bold new steps into the digital age. Achieving these goals, to put it bluntly, will be a very tall order.

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