Journal Register Files for Bankruptcy

The Journal Register Co., a newspaper company with dailies in the Philadelphia region that have a combined suburban circulation of 160,000, filed for bankruptcy protection from its creditors yesterday.

The Yardley company also operates newspapers in northeast Ohio and in Michigan, Connecticut, and New York. It blamed its troubles on a slump in advertising.

Revenue had declined 20 percent since 2006, the company said. Moreover, it carried a huge debt load, the legacy of a business strategy of buying daily and weekly newspapers in suburban areas. In recent months its stock traded at pennies a share.

The company still has more than 100 papers in operation.

Several of its weekly newspapers in the Philadelphia area have closed since late 2008 as the company slashed costs. According to news reports, they are the Germantown Courier, the Mount Airy Times Express, the Olney Times, the News Gleaner, and Northeast Breeze.

Locally, the company still publishes the Delaware County Times, West Chester Daily Local News, Pottstown Mercury, Norristown Times Herald, and Lansdale Reporter, as well as the tabloid Trentonian in New Jersey.

A reporter at the Delaware County Times last night referred calls to Edward J. Yocum at company headquarters. Yocum, senior vice president and general counsel, did not return a call seeking comment.

Under a reorganization plan filed in U.S. Bankruptcy Court in New York, the company would cancel its stock and become a closely held company owned by its lenders, according to Bloomberg News. It listed debt of as much as $1 billion and assets of between $100 million and $500 million in its Chapter 11 documents.

"With the increased competition from other forms of media and slumping advertising revenues, the downward pressure on newspaper earnings will likely remain intense in the near term," chief executive officer James Hall said in court papers.

Hall asked in the court documents that the judge maintain employee salaries and benefits to keep up morale.

In fall 2007, the company sold its corporate jet, eliminated management bonuses and country-club memberships, closed 34 publications, and cut at least 112 workers, Bloomberg reported.

The company sold its Massachusetts community newspapers to Gatehouse Media for about $72 million in February 2007. At the same time, it sold a Rhode Island community newspaper group to RISN Operations Inc. for $8.3 million.

As part of the bankruptcy case, the company has asked for permission to pay as much as $1.7 million in bonuses to 30 top officers and key employees should the Journal Register meet certain reorganization goals, including closing more papers and eliminating more employees. The company employs about 3,500 people.

The law firm handling the bankruptcy filing is Willkie, Farr & Gallagher L.L.P. The newspaper company hired Lazard Freres & Co. as financial advisers.

Contact staff writer Bob Fernandez at 215-854-5897 or bob.fernandez@phillynews.com.