Owner of 'Rockford Register-Star' Declares Bankruptcy

Owner of 'Rockford Register-Star' Declares Bankruptcy

GateHouse Media says day-to-day operations will not be affected.
WILMINGTON, DE -- GateHouse Media, owner of 'Rockford Register Star' and other local publications, has filed for Chapter 11 bankruptcy in federal bankruptcy court.  According to a press release, the deal will allow it to unload nearly $1.2 billion in debt by paying creditors 40 cents on the dollar as part of a reorganization plan.

The company will merge with another publisher, Local Media Group, to form New Media Investment Group, Inc.  It also reported that pension plans, trade and other unsecured creditors would not be impacted by the bankruptcy.

Less certain is how the change will impact operations at publications like the 'Register-Star.'  GateHouse has been losing money for some time according to publicly released balance sheets, but a large percentage of those losses could be attributed to servicing its debt, which will be nearly eliminated by the bankruptcy.  Declining newspaper ad sales, however, were also a factor in the company's lack of profitability, an ongoing problem for newspaper publishers nationwide.

GateHouse CEO Michael Reed issued a statement saying, "We don't believe our customers, vendors, or employees will notice any change on our day-to-day operations as a result of the bankruptcy.  From an operational standpoint, it's business as usual."

GateHouse recently announced it's moving about 50 jobs which work in production hub from Rockford to Austin, TX.  A group of 'Register-Star' employees also voted to unionize earlier this year.

To read the entire release, click on the link below:

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