By Jamie Smith Hopkins, The Baltimore Sun
10:46 AM EDT, March 21, 2014
Dolan Co., which owns The Daily Record, plans to file for bankruptcy-law protection next week, the Minneapolis-based company announced Thursday.
Dolan, a professional services and business information firm, showed signs of mounting financial distress in recent months. It reported losses, hired a chief restructuring officer and in January saw its stock delisted from the New York Stock Exchange as a result of a consistently low share price.
Dolan said it had reached agreement with key secured lenders on a "comprehensive balance sheet restructuring." To carry out the agreement, it and some of its subsidiaries plan to file for a Chapter 11 reorganization.
Such a "pre-packaged" bankruptcy typically takes less time to resolve in court.
Dolan said it will operate its businesses as usual. It also anticipates that its unsecured creditors, including vendors, would be fully paid, while its secured creditors would take ownership of the company.
"The Company remains well positioned in its core markets. This reorganization step is necessary to unlock these current businesses from the weight of debt principally associated with its previous mortgage foreclosure processing businesses," said Kevin Nystrom, the company's chief restructuring officer, in a statement.
Dolan also has struggled lately with lower levels of public-notice advertising in its publications. It publishes more than 20 legal and business newspapers around the country, including the five-day-a-week Daily Record, which reported free and paid circulation of 5,500 in 2012.
In a statement on the Daily Record website, Suzanne Fischer-Huettner, its publisher, called the newspaper "consistently profitable."
"We are a strong operation with strong local leadership," she said. "Despite today's news about our parent company, The Daily Record plans to provide essential business and legal news for the next 125 years using traditional means and all the new digital technology there is to offer."
Christopher A. Eddings, president of the newspaper and vice president of Dolan's Business Information Division, said in the statement that the bankruptcy process will lift a burden from Dolan holdings like The Daily Record.
"I do think it is really important to say that, assuming everything goes as planned at this point, that all of our bills will be paid," Eddings said. "No one will be harmed in any way."
Dolan said it expects to reduce its debt from $170 million to $50 million.
Dolan could not be reached for further comment.
Dolan said its existing shares would be canceled under the proposed bankruptcy plan. Its stock fell 12.5 cents a share Thursday to close at 2.5 cents each.
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