BANKRUPTCY UPDATES

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Bankruptcy Filings Continue in Newspaper Industry

The newspaper industry has been hit hard by the recession, as even juggernauts like the L.A. Times and the Chicago Tribune have faced financial adversity. The trend continues this week, as the latest company to file for bankruptcy protection is one with operations across the country.

Brown Media Holdings Co. and Brown Publishing Co. have filed for Chapter 11 bankruptcy. The move puts into question the future of 150 publications from Colorado to New York.

Based out of Cincinnati, Ohio, the businesses filed for bankruptcy in the U.S. Bankruptcy Court for the Eastern District of New York on Friday. According to an article in Coloradoan.com, the company plans to sell off its assets, which may include newspapers or websites.

The companies and their affiliates had assets that totaled $94.1 million, and debts that together equaled $104.6 million. They have already cut staff and jettisoned unprofitable publications.

CEO Roy Brown said the decision to file for bankruptcy protection was a difficult one for both the family and the shareholders involved. It was made, he said, to make sure that the businesses were “best positioned to prosper in the years ahead.” He cited the “unprecedented economic and financial crisis” as a cause, and praised his employees for the grit and determination that they showed in the face of hard times. “It is with their interests pre-eminently in mind that we have pursued this course,” he said.

The family-owned Brown Media Holdings and Brown Publishing, founded in Ohio in 1920, are the parent companies of news outlets including the North Colorado Business Report, the Boulder County Business Report, the Wyoming Business Report, Dan’s Papers, and more. Across the board, it publishes 15 daily newspapers, 32 weekly newspapers, 11 business publications, 41 free publications and 51 web sites based on news and niche markets.

The company also owns a printing operation, a database management company and an events-related business under the umbrella the Brown Media Holdings and Brown Publishing.

In the bankruptcy filing, Brown cited a drop in revenues from a decline in advertising revenue related to the real estate market as one of the reasons for their circumstances leading to the bankruptcy filing. In its Ohio papers, the company cited a drop in retail advertising revenues.

The companies owe secured creditors, of which there are five, $70.5 million. PNC Bank and Wilmington Trust Co. are listed as its two major creditors.

The most prominent unsecured creditors in the bankruptcy filing are Abitibi Consolidated Sales, which Brown Publishing owes almost $300,000. White Birch Paper Co. is owed about $219,000, and Page Cooperative is owed about $195,000.

In the bankruptcy filing, Brown said that its plan is to sell assets in 10 states to an unnamed bidder.

Newspaper circulation fell 8.7 percent in the months preceding this March, which is a slight slowing of the 11 percent fall from the six months before that. That said, ad revenues improved last year as online sales picked up, but even those improvements have slowed.