Freedom Communications Files For Bankruptcy

If it seems like every week another media company files for bankruptcy, that may be because every week another media company does file for bankruptcy. This week's unfortunate organization: Freedom Communications, California-based owners of the Orange County Register and more than 30 other newspapers with a combined circulation of "nearly a one million [sic] subscribers" (per the company's own data.) Freedom also owns television networks in several cities, including Albany, New York.

According to Bloomberg, Freedom claimed more than $1 billion in debt in its Delaware Chapter 11 filing. The OC Register's Mary Ann Milbourn offered readers a handy FAQ headlined What Freedom's Chapter 11 Means, which includes the following:

Q. Why was bankruptcy filed now?

A. Freedom Communications incurred $770 million in debt stemming from the 2004 buyout of family members who wanted to cash in their shares of the closely held private company. At the time, the debt load appeared to be reasonable, but the company got hit by the economic downturn, the loss of ad revenues, a decline in circulation, and fierce competition from the Internet and other new media. While it has met its financial obligations to date, the company was not expected to be able pay the next payment when it came due at the end for the first quarter of 2010. Mark A. McEachen, Freedom's chief financial officer, said filing now with the agreement of the lenders allows for the reorganization to proceed on a more orderly basis.