IT APPEARS THE Journal Register Company bankruptcy plan hit a snag last week at the 11th hour. Law360 reported that newspaper unions involved in the process, as well as the Communications Workers of America, have objected to the sale of Journal Register Co. to the stalking horse bidder that is a subsidiary of Alden Global Capital, 21st CMH Acquisition. A hearing on the sale had been scheduled for Feb. 21.
In a story on the Newspaper Guild’s website, Guild president Bernie Lunzer said Journal Register Co. isn’t respecting the process, or its workers.
“While we know we won’t walk away with the status quo, we make it clear that our members, their workers, will be treated with dignity and respect,” he said. “The Journal Register Co. is showing no such respect, not for its workers and not for the bankruptcy process itself, which certainly was never intended to be a get-out-of-jail-free card for businesses facing some financial trouble every couple of years.”
Pursuant to the bankruptcy process, Journal Register Co. mailed notices to employees and agencies in the 10 states where the company operates papers that layoffs could result from the bankruptcy, including 844 workers in Michigan, 285 in Connecticut, 230 in New York and 217 in Ohio.
From a story in Crain’s Cleveland Business, “Journal Register Co. puts its employees on needles and pins”:
The process that JRC is going through “is quite common in bankruptcy proceedings,” John Collard, chairman of Strategic Management Partners, an Annapolis, Md.-based business turnaround firm, tells The New Haven Register.
“When somebody buys a company out of bankruptcy, they are buying a specific list of assets, usually not 100 percent of what the existing business has,” Mr. Collard tells the newspaper. “While they can purchase assets, it’s not possible to purchase employees. So the acquiring company comes to employees and offers them the same terms they had with the old company or different terms.”
He says it’s likely that 21st CMH Acquisition Co. will not retain all of the Journal Register employees.
And from a story in The Saratogian:
“The notices sent to all Journal Register Company employees – from part-time staffers to managers to the executive team – are the next step in the Company’s ongoing sale process. Journal Register Company’s leadership team cannot speak on behalf of the new owner but has continually expressed to the purchaser that a competent and competitive workforce is critical to the company’s success moving forward,” Jonathan Cooper, vice president for media relations and employee communication at Digital First Media, said. Digital First Media currently operates Journal Register Company and other media companies.
April 17 is the target date for the sale to be completed.
Alden Global Capital is a large stakeholder in another high-profile media bankruptcy:
Reader’s Digest parent company files for bankruptcy again | Reuters, Feb. 18, 2013
And for Journal Register Co., it’s deja vu all over again:
Journal Register Faces Bankrutpcy Plan Objections | New York Times, June 26, 2009
For more information on Alden Global Capital, click on the tag below this story.