California residents know that this economy has taken its toll on many businesses. The economy has resulted in several companies having to seek business bankruptcy protection.
Journal Register Co. is another business that is seeking the protection of bankruptcy. This is the second time in three years this company has sought this protection. The company is seeking to restructure its debts and sell its assets.
The Journal Register owns 18 newspapers and other media operations in 10 states. It is seeking Chapter 11 protection to reorganize to assure a fast sale.
Bankruptcy provides a company protection from creditors. It prevents creditors from contacting a company in bankruptcy. It also allows the company time to restructure its assets and work with creditors to come up with a repayment plan. Bankruptcy halts all creditor actions against the company, including mechanic's liens and repossessions of business property.
A hedge fund that invests in distressed companies bought the Register last year. The company has more than doubled its digital audience since it first declared bankruptcy but struggling print sales have left the company still struggling.
The last time the company filed for bankruptcy was in 2009. The company restructured and emerged with over $200 million in debt and a structure that included leases and pensions that an affiliate says were unsustainable.
It doesn't take long, especially in a struggling economy, for a business to end up in trouble with creditors. Bankruptcy can be a beneficial option to stop the creditors and allow for restructuring or reorganization of debts.
Source: Sacramento Bee, "Journal Register Co. seeks bankruptcy protection," Maryclaire Dale, Sep. 5, 2012