Charleston Gazette-Mail Files for Bankruptcy: Sell-Off to Ogden Newspapers Could Result in Layoffs

Charleston Gazette-Mail Bankruptcy
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Charleston Newspapers, owners of the Charleston Gazette-Mail, filed for Chapter 11 bankruptcy. The company also filed a Worker Adjustment and Retraining Notification (WARN) with the City of Charleston, saying that it was selling the newspaper and that as a result of the sale, 206 employees would be terminated. Charleston Newspapers currently employs 209.

It is expected that Charleston Newspapers will file for Chapter 11 on January 30; this would start a 60-day countdown until new owners could take over. Wheeling Newspapers, Inc., the parent company of the Ogden Newspaper chain, is currently the highest bidder. It’s not yet a done deal. During those 60 days, there is a 30-day window when other potential buyers could outbid Wheeling Newspapers.

Charleston Newspapers is facing what the broader print newspaper industry has been facing for the last number of years: heavy losses in advertising and circulation.

Susan Chilton Shumate, publisher of the Charleston Newspaper, told employees in an email, “The Charleston Gazette, now the Charleston Gazette-Mail, has been my family’s passion for the last century. To follow in the footsteps of Ned Chilton, my father, and Betty Chilton, my mother, as publisher of this paper has been a tremendous honor for me and my family. At the end of this process, we will be letting go of that passion.”

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The decision to file for Chapter 11 comes just days after U.S. District Judge Thomas Johnston upheld a $3.8-million ruling against Charleston Newspapers.

In August, arbitrator Edward McDevitt ruled the Gazette-Mail’s owners had to pay nearly $3.8 million to the former owners of the Daily Mail. The judgment represented the profit from the Gazette-Mail owner’s sale of the “dailymail.com” Internet address, past-due management fees, future management fees, attorneys fees, court costs, and post-judgment interest.

Ogden Newspapers Is Highest Bidder, Change in Ownership Could Result in Layoffs

As it stands, Wheeling Newspapers is the highest bidder for Charleston Newspapers. The company, which is operated by the Nutting family, owns the Pittsburgh Pirates and more than 40 daily newspapers across the U.S., in Florida, Hawaii, Indiana, Iowa, Kansas, Maryland, Michigan, Minnesota, New Hampshire, New York, North Dakota, Ohio, Pennsylvania, Utah, Virginia, and West Virginia.

On Monday, January 29, the City of Charleston received a WARN notice from Charleston Newspaper:

“Charleston Newspapers is being sold to Wheeling Newspapers, Inc. or such other entity that may place a higher bid for the company’s assets at an auction. As a result of the sale, the employment of 206 employees will be terminated no sooner than 60 days from today on or about March 30, 2018. The termination will impact all job titles and job classifications of Charleston Newspapers.”

It is possible that the new owners will want to keep the current employment levels, but since this has not been determined, Charleston Newspapers decided to issue the WARN notice.

Trip Shumate, President and CFO of Charleston Newspapers said, “Our hope is that Wheeling Newspapers will hire all of our employees. Once free from the liabilities that have been holding our operations back, we hope that they will be able to maintain the high level of journalism our customers and this community have come to expect.”

 

Sources

Gazette-Mail declaring bankruptcy; Wheeling Newspapers is planned buyer,” Charleston Gazette-Mail, January 29, 2018.

Gazette-Mail filing for bankruptcy; Ogden Newspapers current high bidder,” Metro News, January 29, 2018.

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