The Journal Register Company (JRC) which operates newspapers in 10 states has again filed for Chapter 11 bankruptcy and is seeking a buyer. The company first went into bankruptcy in 2009.
JRC’s subsidiary Montgomery Newspapers runs four newspapers in Northwest Philadelphia: he Germantown Courier, The Mt. Airy Times Express, The Roxborough Review and The West Oak Lane Leader.
All four JRC-owned weeklies are produced from the Roxborough Review newspaper office. Roxborough Review editor, George E. Beetham, Jr. declined to comment on the bankruptcy and what it could mean to the local news outlet.
The bankruptcy process
The bankruptcy process is anticipated to take “90 days or so, almost to the end of the year,” said John Paton, CEO of Digital First Media, the parent company of JRC.
Paton stated that during the bankruptcy process there will be no changes in business operations for all of JRC’s media holdings. After the sale, however, any restructuring changes will be “up to new owners,” Paton remarked.
The bankruptcy filing came about because JRC ‘s long term obligations, such as employee pensions were “no longer sustainable,” Paton shared. The company’s press release regarding the decision also stated that “from 2009-2011 print advertising declined 19% and print is more than half of Journal Register Company’s total revenue.”
A subsidiary of Alden Global Capital LLC, a hedge fund which purchased JRC in 2011, has already placed what is known as a stalking horse bid. Paton explained that the affiliate, 21st CMH Acquisition Company, had been specifically created to make a “credit bid.” The bid ensures that the collateral is not sold for less than the debt.
As both Paton and the company’s website employee FAQ on the process detailed, the bankruptcy creates an “automatic stay” which prevents creditors from collecting debts, such as bank loan officers.