Journal Register Co., the bankrupt owner of 20 daily newspapers including the New Haven Register in Connecticut, won court permission to use lenders’ cash collateral to fund operations while it reorganizes.
U.S. Bankruptcy Judge Allan Gropper approved the use of cash in court documents filed today. Secured lenders owed $695.2 million, with JPMorgan Chase Bank NA as agent, will have their collateral protected under an agreement that requires the company to comply with a 14-week budget.
Journal Register also will pay legal fees accrued by the lenders’ law firm, Milbank, Tweed Hadley & McCloy LLP, and adviser Loughlin Meghji & Co. The publisher, based in Yardley, Pennsylvania, filed for bankruptcy Feb. 21 with plans to cancel its stock and become a closely held company owned by lenders.
Gropper allowed the company to pay critical vendors for supplies delivered before its bankruptcy and to hire Conway, Del Genio, Gries & Co. for restructuring services and Robert P. Conway as chief restructuring officer. Seyfarth Shaw LLP will be hired as “Special Labor Counsel.” Journal Register has said it wants to end contracts with four unions to trim pension costs.
Separately, former employee Teri Tucker yesterday asked Gropper to lift the so-called automatic stay that protects bankrupt companies from lawsuits as they reorganize. In court documents, Tucker cited a $4 million judgment she won in June over her firing. A settlement conference set for Feb. 23 was put off when Journal Register filed for bankruptcy.
The case is In re Journal Register Co. 09-10769, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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