Another Newspaper Company Goes Bust

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Another one down, more to come… 

It’s worth noting that these early busts can be tied directly to a management decision–specifically the decision to load up on debt.  These companies would have survived a lot longer if they hadn’t borrowed so much money.

Shira Ovide, Wall Street Journal: Journal Register Co., the debt-strapped owner of the New Haven Register and 19 other daily papers, filed for Chapter 11 bankruptcy protection Saturday, at least the third newspaper publisher to tip into bankruptcy court in recent months.

Journal Register has been plagued for more than a year by an unsustainable level of borrowing, made worse by an industry-wide plunge in revenue. Journal Register’s woes stem from an acquisition binge, the pinnacle of which was a 2004 deal to buy a chain of Michigan newspapers for more than $400 million…

Since last summer, Journal Register has operated under the auspices of a restructuring adviser, and the company had stopped making interest payments on its borrowings and closed dozens of newspapers as it worked to fend off creditors…

In its bankruptcy documents filed in Manhattan bankruptcy court, Journal Register said it had assets of $596 million as of Nov. 30 and $692 million in debt, including unpaid interest.

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