By Gregory B. Hladky
3:25 PM EDT, September 5, 2012
If you’re fascinated (or appalled) by the often strange paths taken by corporate America, check out these recent stories about the latest bankruptcy action by the parent company of the New Haven Register.
The New Haven Register is owned by the Journal Register Company, which has just filed for bankruptcy – again. (Full disclosure: I was an employee of the New Haven Register during its first bankruptcy experience and was laid off from that paper in 2008.)
The Journal Register Company is owned by Digital First Media, which is largely owned by Alden Global Capital, a big shot hedge fund.
According to a news release/blog post from John Paton, CEO of Digital First Media, his company has “signed a stalking horse bid for Journal Register Company from 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC.”
So Digital First Media may be selling the Journal Register Company to the hedge fund that owns Digital First Media.
Sweet. If advertising revenue has plunged by 19 percent between 2009 and 2011, as Paton has stated, why would you want to buy back your own failing company? According to experts, it's one way to dump your non-performing assets and liabilities (like employee pensions perhaps?) and improve your bottom line profits.
Ya gotta love the way Wall St. works all the angles, especially those hedge fund bad boys.
And all the employees of the New Haven Register are going to feel waaay better knowing that its publisher, Tom Wiley, was quoted by the New Haven Independent as saying staff reductions (translation: layoffs) aren’t part of “any plans in place.”
Unfortunately, Wiley also said he “can’t comment on what we may do in the future.”
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