Journal Register Company files Chapter 11 bankruptcy; Morning Sun says it won’t be affected
Journal Register Company, the parent company of the Morning Sun and the Oakland Press, has filed for Chapter 11 bankruptcy for the second time in three years.
Chapter 11, a chapter of the United States Bankruptcy code, gives businesses protection from creditors during financial difficulty for a limited period of time to allow the company to reorganize.
The company emerged from bankruptcy in 2009 with $225 million in debt.
“Journal Register Company’s filing will have no impact on the day-to-day operation of Journal Register Company, Digital First Media or MediaNews Group during the sale process,” said John Paton, chief executive officer for Digital First Media. “They will continue to operate their business and roll out new initiatives.”
Rick Mills, executive editor of the Morning Sun, agrees with Paton. He said the bankruptcy won’t change the paper.
“We don’t expect any changes here at the Morning Sun, for our staff or for our readers,” he said.
The latest filing allows the Journal Register Company to continue normal business operations during the prompt sale process, which Paton said is expected to take about 90 days.
The company reported $268.6 million in liabilities and $235 million in assets. It said its pension legacy cost structure was unsustainable and threatened the company’s efforts for a successful digital transformation. Since then, the company has lowered debt to $160 million.
Paton said from 2009 to 2011, digital revenue grew 235 percent, and the company’s digital audience more than doubled. This year, digital revenue is up nearly 33 percent. The company has invested heavily in digital with expenses up 151 percent since 2009.
During the same timeframe, print advertising revenue declined 19 percent, which represents more than half of the company’s revenues.
Paton said the drastic move will not change how the company is run.
JRC is owned by Alden Global Capital LLC, a hedge fund manager. Alden holds a $152.3 million secured claim in the case, according to court records.
Paton said that Journal Register Company will continue to better the company now and into the future.
“Journal Register Company has and will continue to invest in the future,” Paton said.
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