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Rowlett Lakeshore Times’ parent company files for bankruptcy

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AP-American Community Newspapers Inc., which operates the Rowlett Lakeshore Times and other small newspapers in Dallas and three other major U.S. markets, has filed for bankruptcy protection, citing “an unprecedented and severe decline in advertising revenue.”

The company filed its Chapter 11 petition Tuesday in U.S. Bankruptcy Court in Delaware, becoming the sixth publisher of daily newspapers to file for bankruptcy protection.

The company said its secured creditors will provide a $5 million debtor-in-possession credit facility. In its filing, the company lists assets in the range of $50 million to $100 million and debts totaling about $107 million.

The Dallas-based newspaper group has 86 newspapers, including three dailies, and 14 niche publications in the Dallas; Minneapolis; Columbus, Ohio; and Northern Virginia areas.

According to the filing, the chain has a combined circulation of about 1.3 million and earned $63.8 million in revenue in fiscal year 2008.

The company said in a news release that it planned to continue normal business operations.

“Our readers and advertisers are our most important assets, and we are committed to providing them with outstanding service in the months and years ahead,” said Chairman and Chief Executive Gene Carr.  

In the filing, the company said it stopped making quarterly debt payments in September and was running out of cash “without any prospect of obtaining additional funding.”

The filing indicated that ACN planned to sell its assets, without providing additional details. A company spokesman didn’t immediately return a phone call seeking comment.

Carr said ACN didn’t have the cash flow to support its capital structure and planned to sell assets to reduce debt.

“This will place us in a better position to execute our business plan and serve our communities,” Carr said.

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