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Star Tribune files for Chapter 11 bankruptcy
Facing sharp revenue declines, the newspaper seeks bankruptcy protection, hoping to cut costs and restructure debt.
By DAVID PHELPS, Star Tribune
Last update: January 16, 2009 - 6:31 AM
The Star Tribune, saddled with high debt and a sharp decline in print advertising, filed a Chapter 11 bankruptcy petition Thursday night.
Minnesota's largest newspaper will try to use bankruptcy to restructure its debt and lower its labor costs.
Chris Harte, the paper's publisher, said the filing would have no impact on home delivery, advertising, newsgathering or any other aspects of the paper's operations.
"We intend to use the Chapter 11 process to make this great Twin Cities institution stronger, leaner and more efficient so that it is well positioned to benefit when economic conditions begin to improve," Harte said in a statement.
The filing, which was made with the U.S. Bankruptcy Court in the southern district of New York, had been expected for months. It follows several missed payments to the paper's lenders, and it comes less than two years after a private equity group, New York-based Avista Capital Partners, bought the paper for $530 million.
In its filing, the newspaper listed assets of $493.2 million and liabilities of $661.1 million.
Like most newspapers, the Star Tribune has experienced a sharp decline in print advertising. Its earnings before interest, taxes and debt payments were about $26 million in 2008, down from about $59 million in 2007 and $115 million in 2004.
The Star Tribune, with Sunday circulation of 552,000, is the 10th-largest Sunday newspaper in the U.S. Its daily circulation of 334,000 makes it the 15th-largest daily based on circulation. The paper's website, StarTribune.com, averaged 76 million page views per month during the past six months, placing it among the top 10 newspaper websites in the nation.
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