The Journal Register Company — the parent company of Connecticut’s second-largest newspaper, the New Haven Register — filed for Chapter 11 bankruptcy protection from its creditors Saturday.
Citing decreased advertising and circulation revenue, the Journal Register Company will cancel its stock and become a closely held company controlled by its lenders, according to the proposed bankruptcy plan it filed in U.S. Bankruptcy Court of the Southern District of New York.
Journal Register CEO James Hall said in a statement that the company “will publish content as usual throughout the process.” But several media watchdogs said the company will likely lay off staff and cut spending at its daily newspapers, in addition to closing many of its weekly newspapers, a strategy the company has aggressively pursued in recent months.
The editor of the New Haven Register, Jack Kramer, said Sunday he was unsure what changes, if any, will occur at the newspaper.
“I think we’ll be fine,” he said, declining further comment.
The Journal Register’s bankruptcy filing is not a surprising one, given that the company’s stock price has declined as steadily as its advertising revenue over the last few years.
It is highly unlikely the New Haven Register will be shut down, media experts said Sunday, because it is the largest and oldest newspaper of the roughly 200 publications the Yardley, Penn.-based company owns.
In a press release published on the Journal Register Web site Saturday, the company said the proposed bankruptcy plan will save the company about $420 million. The company had $596 million in assets and $692 million in debt as of Nov. 30.
A company in debt can file for Chapter 11 bankruptcy protection once it finds itself unable to keep itself afloat and pay creditors on time. With their initial filing in federal bankruptcy court, most debtors offer — as the Journal Register have offered — a company reorganization plan.
Since 2006, the Journal-Register has been scrambling to find donors and test radical business models. It has also quietly shut down countless weekly newspapers along the East Coast.
But the company, like many other major newspaper publishers, has so far struggled to find a solution.
As a testament to the Journal Register’s decline, the company stock — which had traded at $21.84 in March 2004 before it began its precipitous fall — was removed from the New York Stock Exchange listings last April and now sells for less than half a penny. (It currently costs about $140,000 to purchase all of the company’s outstanding stock.)
The New Haven Register, which started publishing in 1755, has felt the effects of its parent company’s failure and its own advertising slump. The Register announced widespread layoffs in the last year, the most recent occurring last November, when the newspaper laid off 20 and dropped its weekly entertainment, Play.
The company laid off clerical staff members as well as writers, including its last full-time Capitol reporter, Greg Hladky, and its science editor, Abram Katz. (Katz later took a job as a science reporter at the New Haven Independent.)
Twenty-six of the Journal Register’s 37 lending companies, including JPMorgan Chase & Co., agreed to the bankruptcy plan.