Entries associated with the tag "Journal Register Company":

If you're a fan of the corrections columns in which newspapers daily confess their sins, the more trivial the better, you might conclude they gladly stand naked to their enemies. But not so much.

Editor-at-large Mark Fitzgerald of Editor & Publisher observes that troubled companies such as the Journal Register Company and MediaNews Group have decided to stop filing those arcane but revealing financial reports such as the SC 13D and the 10-K with the Securities and Exchange Commission. It's a trend Fitzgerald doesn't like much, but he expects it to continue.

Fitzgerald, who's based in Chicago, discusses the matter on "Fitz & Jen Give You the Business," a podcast he produces about once a week with Jennifer Saba, an E&P associate editor in New York. Saba assumed what I did: that public corporations are legally bound to file with the SEC. But Fitzgerald explains that companies willing to surrender the opportunity to raise capital via markets such as the New York Stock Exchange don't have to. And woebegone media companies that recognize they don't have a prayer of raising public capital are concluding that the elaborate financial statements the SEC asks for are too expensive, too much of a hassle, and too embarrassing to submit. They'll file whatever the banks they owe money to tell them to file, and Fitzgerald thinks these banks want them to keep under their hats the concessions the banks have been willing to make to keep the companies from going under. 

He observes that the Tribune Company, now that it's gone private, doesn't have to tell the SEC anything the banks that financed Sam Zell's takeover don't order it to tell. And as for the Sun-Times Media Group, whose stock is now worth about 70 cents a share -- it's a prime candidate to tell the SEC to shove it. Fitzgerald savors the irony. He tells Saba it was the brokerage firm of Tweedy, Browne that began studying the documents Hollinger International turned over to the SEC when Conrad Black ran the company and wondering, "Who are all these guys getting all these financial fees? And why are you selling everything to yourselves and getting fees back on top of that?" Fitzgerald continues, "That kind of exposed the accounting house of cards going on -- according to the federal authorities the larceny going on.”

UPDATE: The Sun-Times Media Group announced Wednesday that it has no steps in mind to bring its greatly depreciated common stock into keeping with NYSE standards, and therefore expects the exchange to stop listing the stock. In the future STMG stock will be traded on the OTC Bulletin Board. 

It can be a heartwarming sight when the next generation steps up -- depending on what you thought of the first generation. Word comes that a string of nine small newspapers in Rhode Island is being sold to a company headed by Melanie Radler. Her father, David Radler, started out with his own little papers in Canada and wound up publisher of the Chicago Sun-Times and COO of Hollinger International, where prosecutors say he and his longtime (until recently) pal Conrad Black pocketed money hand over fist. In March Black goes on trial on corruption charges in federal court in Chicago. Radler has pleaded guilty and turned state's evidence.

Melanie Radler is a 1999 Northwestern law school grad who went to work as a litigator for Winston & Strawn, the law firm chaired at the time by Jim Thompson. Back then the former governor was on cordial terms with Radler and Black -- in fact he presided over the Hollinger board's all-important audit committee. Today that's all history Thompson would probably rather forget, and Melanie Radler has surfaced as president of RISN Operations Inc., the firm buying the Rhode Island papers. The vice president is Roland McBride, who might be described as an old crony of her dad's. He's CFO of Horizon Publications Inc., of Marion, Illinois, a small newspaper chain that Radler still controls and that Black used to own a large piece of. Horizon shows up right in the middle of the Hollinger scandal. According to the 2005 indictment, noncompete payments written into the deal when Hollinger sold some publications to Horizon for more than $43 million in 1999 meant that Black, Radler, and a third defendant "had, in essence, negotiated an agreement with themselves . . . not to compete against themselves . . . resulting in them paying themselves . . . approximately $1.2 million."

McBride was also CFO of the American Publishing Company -- a Hollinger subsidiary that by the end of 2000 had sold off virtually all its newspapers. Nevertheless, the indictment says, in 2001 four Hollinger officers were paid a total of $5.5 million (in checks backdated to 2000, with almost all the money going to Black and Radler) in return for their promises not to compete with the APC if they left Hollinger. They took the money, the indictment marvels, not to compete "with a company that was, for all intents and purposes, no longer in the newspaper business." A special committee of the Hollinger Board investigating the scandal would identify McBride as the APC officer who signed the checks and characterize the explanation he gave as "completely nonsensical."

McBride and Melanie Radler couldn't be reached to talk about their new adventure. A Rhode Island journalist tells me the outgoing owners, the Journal Register Company, "bled these newspapers down to a fraction of what they used to be." If Melanie Radler has inherited any of her dad's genius -- or if dad's lurking in the background of this deal -- she'll show them. David Radler never saw a turnip that wasn't a little plumper than it needed to be.