A Pennsylvania business could file bankruptcy so that its chief officers can attempt to reaffirm control over a restructured company. This may include a new, reduced debt load, new financing and an organizational revamping of management. An example of this occurred in another state recently when the owner of a daily newspaper, along with new investment partners, announced plans to bid for control of the business, which is currently in a Chapter 11 bankruptcy.
Newspapers throughout the country have been facing hard choices and reduced cash flow as a result of the digital revolution. Many people have no need for newsprint and stacks of newspapers when they can order the news they want on their various digital devices. Publications have been scrambling to find the correct formula for surviving in that environment.
The Orange County Register was a recent victim of that shaky reality, which has struck the Southern California market particularly hard. However, the newspaper issued a statement right after the filing, saying that its chief executive and publisher would join other investors to reorganize the company's financial structure and reassume ownership. The hope is that the company will emerge with a solid financial foundation in order to maintain and strengthen its leading position in providing local news to its reading communities.
It appears that part of the move was designed to end any further involvement of the paper's former CEO, who had made a highly publicized choice in 2012 to emphasize print media instead of digital. That decision backfired, leading to layoffs and the closing of some publications. The bankruptcy will allow the newspaper to try again, with a reduction in its overloaded debt burden, and with a new strategy for future growth. The federal bankruptcy option is similarly available to businesses in Pennsylvania.
Source: Los Angeles Times, "Orange County Register owner files for bankruptcy", Andrew Khouri, Nov. 1, 2015