Sun-Times Media Group (STMG)--burning through cash at more than $5 million a month--filed for Chapter 11 bankruptcy protection Tuesday.
The parent of the Chicago Sun-Times and 59 Chicago-area newspapers said it would continue to operate its papers as usual, while it focuses on further improving its cost structure and stabilizing operations.
With its Chapter 11 filing in U.S. Bankruptcy Court in Delaware, STMG became the second Chicago-based newspaper chain to file for bankruptcy protection. Last Dec. 8, Chicago Tribune parent Tribune Co.--straining under nearly $13 billion in debt--filed for protection while it restructures.
While STMG said in a statement the company believed it had enough "financial resources" for day-to-day operations, it has retained Rothschild Inc. to "commence a process for a sale of assets."
"Over the past several months, the company has taken several steps to reduce costs and strengthen our organization," STMG Chairman and Interim CEO Jeremy L. Halbreich said in a statement. "However, the significant downturn in the print advertising environment that has affected newspapers across the country has continued to severely impact us.
"Unfortunately, this deteriorating economic climate, coupled with a significant, pending IRS tax liability dating back to previous management, has led us to today's difficult action," he continued. "Importantly, we firmly believe that filing for Chapter 11 protection and exploring the potential sale of assets or new investment in the company offers us the best opportunity to protect our respected media properties for the long term."
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