Brown Media Holdings, a 90-year-old family-owned company with 18 daily and 27 weekly newspapers in 10 states, filed for Chapter 11 bankruptcy with over $95 million in debt. The company, which is hoping to sell their business during bankruptcy, is seeking $2.5 million in financing to fund the operations of their publications while they find a buyer. Currently Brown Media has what's called a "stalking horse" bidder which is supported by management and who may be willing to acquire the company, setting a minimum price for the company's assets. Roy Brown, the chief executive officer of Brown Media expresses his hopes that the Chapter 11 bankruptcy would help the company overcome the recession.
"Over the past two years, our employees have battled the effects of an unprecedented economic and financial crisis with inspirational grit and determination," Roy Brown said in a statement released at the time of the filing and made available to the Star-Telegram on Tuesday.
Brown said the decision to sell was made to "help assure that the businesses involved are best positioned to prosper in the years ahead."
Brown Media's Chapter 11 bankruptcy is only the latest in a wave of bankruptcies to hit the newspaper publishing industry which has faced a downward spiral in revenue. Decreased readership, suppressed advertising spending and the recession have conspired to send many newspaper publishing companies running for bankruptcy protection. And while Chapter 11 bankruptcy can at least help some of these newspaper publishing companies decrease their debt, it is not yet clear if bankruptcy can soften the blow many are experiencing due to the general decline of the newspaper industry.