Journal Register files for bankruptcy

The Journal Register Company negotiated a prepackaged bankruptcy with its key creditors, and plans to restructure its operations. In a press release, CEO James W. Hall said that "We intend to emerge from the Chapter 11 process stronger, leaner and more financially viable in the current environment. We are also pleased to have the support of our lenders in restructuring our debt obligations. Our business will continue its normal operations and we will publish content as usual throughout this process."

The Journal Register is one of the smaller publicly-traded newspaper companies but according to Reuters, "Nevertheless, its filing will increase scrutiny on other U.S. newspaper publishers, including McClatchy Co and Lee Enterprises, which are trying to survive a severe ad downturn without running afoul of their creditors."

Shareholders had already expected their shares to be made worthless, with the stock closing $0.0035 on Friday. The 52-week high was $1.48. The Journal Register Co. is partly a victim of factors beyond its control, but like so many other debt-burdened companies, the board of directors wasted huge amounts of shareholder capital repurchasing stock when the balance sheet was already overleveraged. From February 16, 2006, through December 31, 2006, the Company repurchased 1,178,537 shares at an average price of $11.10. Between April of 2005 and the end of 2007, the company bought back 1,870,800 shares at an average price of $16.06: $30 million invested in buying back stock that is now worthless.