EVERETT—Black Press Media, the parent company of the Everett Herald, has filed for Chapter 15 bankruptcy protection in Delaware on January 16, 2024, owing some $101.2 million to creditors according to court documents.
Filed in British Columbia court a day earlier on January 15, the Companies’ Creditors Arrangement Act (CCAA), gives financially troubled corporations in Canada the opportunity to continue to operate while it restructures its financial affairs. According to Investopedia, “The primary goal of Chapter 15 bankruptcy is to promote cooperation among U.S. courts, their appointed representatives, and foreign courts and to make legal proceedings of international bankruptcies more predictable and fairer for debtors and creditors.”
The purchase price of the deal is estimated at $55.5 million USD to cover outstanding debt and other obligations unless higher offers come in by the February 16 auction bid deadline. To view the full report, click here.
As first announced by the Herald on January 15, Black Press Media hopes to sell to Canso Investment Counsel, a brokerage in Richmond Hill, Ontario, and Deans Knight Capital Management, a private-equity firm in Vancouver, and Carpenter Media Group of Tuscaloosa, Alabama. If the deal closes on or before March 15, 2024, the Canadian companies will control 75% of the former Black Press Media, managing the finances, with its American partner at a 25% ownership overseeing daily newspaper operations.
Black Press Media currently employs roughly 1,200 employees in both Canada and the U.S., and it is unknown what restructuring plan the potential owners have in mind—breakup the company, layoffs, etc. However, according to an article in Post Alley, Metroland who owns 19.35% of Black Press is not in favor of the current offer and may upend the deal. If no agreement is reached by March 15, Black Press Media is likely the to enter receivership (sell the secured debt and pay outstanding bills) or business bankruptcy (closes its doors).
Black Press Media owes approximately $101.2 million USD to creditors throughout the U.S. and Canada—over 200 unsecured creditors approximately $47.1 million USD and four creditors $54.1 million USD of secured debt. The Pension Benefit Guaranty Company in Alexandria, VA, is owed some $44 million USD and comprises the largest unsecured debt source.
Local companies Black Press owes monies to are Inland Empire Paper Company, located in Spokane, $74,000 USD, and Command Media in Seattle $3,200.
As of January 8, the company with its 144 publications, had approximately $1.7 million cash USD on hand. By the March 15 closing date of the CCAA, projected net cash flow plumets to negative $5.7 million USD.
The CCAA identified and sealed the records of 18 key senior executives and key employees in Canada and the US who are crucial in the operations of the company during the restructuring. The company is also attempting to secure $13.8 million to pay wages and vacation pay to employees.
Black Press Media, started in 1975, is owned by David Black who announced his retirement from the company the day of the CCAA filing in Canada. It is headquartered in Surrey, British Columbia. Its primary business is print newspapers and magazines, digital news, marketing and advertising services, commercial printing, and parcel delivery operating in Canada in British Columbia, Alberta, Yukon, Nunavut, and Northwest Territories, and in the US in Washington, Alaska and Hawaii.
The Everett Herald, Black Press Media’s largest Washington state publication, has been a leading news source in Snohomish County for more than 100 years. It has a circulation between 21,000 to 24,000.
The Everett Herald is the latest victim in a trend of corporate media giants facing the challenges to a paradigm shift in news media from centralized outlets to alternative decentralized platforms. For 2023 alone, the corporate media industry announced over 17,000 job cuts.