Sun-Times publisher files bankruptcy but stays the course
The Sun-Times Media Group, publisher of the Chicago Sun-Times and 58 other papers, has filed for Chapter 11 bankruptcy protection, with the intention of reorganizing its operations, settling a sizeable tax liability and possibly find a new buyer. The group's top eight papers have a combined total weekday circulation of 520,761, per the ABC.
No immediate changes are planned for production or delivery schedules, and the company reports that it has sufficient finances to operate through the restructuring, which executives estimate should last only a year. However, a bankruptcy judge could force wage and benefit reductions on the company's unions. Sun-Times chairman Jeremy Halbreich has said that a primary goal is to sustain the company's print and online operations and preserve as many jobs as possible.
“If you are a subscriber to any of our publications, your newspaper will continue to be delivered as it is today, and you will still get the great mix of news, sports, features and opinion that you count on in each edition,” read a letter to readers from Halbreich. “Like many U.S. companies today and like many other newspaper companies across the country, Sun-Times Media Group has faced significant declines in revenue. This process will help us to better address these challenges and ultimately work toward strengthening our commitment to remaining the Chicago area's best, most reliable and most distinguished source of news and information for our readers.”
Halbreich added in his letter that regular updates on the restructuring process will be posted to thesuntimesgroup.com.
The Sun-Times joins the ranks of fellow Chicago publisher, the Tribune Co., which filed bankruptcy in December 2008. However, unlike other debt-ridden newspapers, the Sun-Times' only significant creditor is the IRS. The IRS claims the company owes up to $608 million in back taxes and penalties incurred by former controlling owner, the now-imprisoned Conrad Black.
The Sun-Times has hired Huron Consulting Group to advise it through the restructuring and Kirkland & Ellis as legal counsel. It also has hired Rothschild Inc. to help field buyout offers. Halbreich said that several potential buyers have already come forward.