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Register’s Owner: You’re All “Terminated”
by Paul Bass | Feb 20, 2013 3:03 pm
The people still left working at New Haven’s daily newspaper learned they may be out of a job come April 17.
Their employer, the Journal Register Company, has notified the state labor department that it may lay off all the company’s 285 Connecticut employees on that date.
Or it may not.
The decision is up to the company’s “new” owners. Who are also, in effect, its current owners. More about that lower down in the story.
Employees of the New Haven Register and other JRC publications in Connecticut learned the news in a letter from JRC’s chief human resources officer. The company—which goes by the slogan “Digital First”—snail-mailed hard-copy versions of the letter, dated Feb. 15, to the employees. The letters arrived days later.
JRC recently declared bankruptcy for the second time in four years. The company said it filed to get out from under onerous pension and real-estate debts at a time when declining advertising revenues have severely shrunk operations. Read about that here.
A company called 21st CMH Acquisitions was the only bidder to buy JRC out of bankruptcy. 21st CMH is expected to take over April 17.
State law requires employers to give 60 days notice to the labor department—through an official WARN (Worker Training and Notification Act) letter—before laying off 100 or more workers. JRC has filed such a notice.
The letter to employees referenced the notice.
“At least half” of the 285 statewide JRC employees work for the Register, with about 70 in the newsroom, according to Editor Matt DeRienzo.
“Journal Register Company will be terminating all employees” once 21st CMH Acquisitions takes over the company on April 17, the letter to employees stated. “... [N]o bumping rights exist.”
That doesn’t mean everyone gets laid off. It means no one’s job is safe.
The irony: The new boss is the same as the old boss. CMH is a subsidiary of a hedge fund called Alden Global Capital LLC. Alden Global is also the current owner of JRC. The plan all along was to have a different Alden subsidiary take over the company as part of the bankruptcy, in effect pretending a new owner is in charge so that the company can get out from under its debt.
“Journal Register Company will continue as the employer of all employees until the closing under the Asset Purchase Agreement,” stated the letter to employees, written by Chief Human Resources Officer Robert Monteleone. “Under the Asset Purchase Agreement, upon the closing of the sale, which Journal Register Company expects will occur on or around April 17, 2013, (1) Journal Register Company will cease all of its business operations and the employment of all employees will cease and (2) 21st CMH Acquisition Co. will become the owner of substantially all of the assets and business operations of Journal Register Company. We have asked 21st CMH Acquisition Co. to operate the business usuing substantially all of our current employees. We have expressed to 21st CMH Acquisition Co. that a competent and competitive employee population is critical to the company’s ongoing success.”
Lest Register employees, survivors of rounds of layoffs, take too much heart from that last statement, Monteleone’s letter continues:
“You should note, however, that in accordance with the Asset Purchase Agreement, 21st CMH Acquisition Co., is exclusively responsible to decide which employees of Journal Register Company it will hire after the purchase.”
John Paton, CEO of Digital First, the company that runs the chain, called the letter “a standard part of the bankruptcy process,” “nothing out of the ordinary,” and “driven by the legal aspects of the process.”
“I cannot speak for the potential new owners but we have communicated to them the strength of JRC’s talented employees,” he told the Independent in an email message.
DeRienzo, the group editor in charge of JRC’s Connecticut publications, emailed Register employees encouraging them to call him with any questions about the company’s letter or this news story about it.
“Not much I can say beyond what’s in the story, except to assure folks that it’s business as usual and I expect and hope for little to no change,” DeRienzo wrote.
An Alden Global Capital spokeswoman declined to comment for this story or to provide her last name. (First name’s Rina.)
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It’s not pretty, and a tad Orwellian, but how could it not be thus? An outcome akin to this could have culminated from the get-go, but I’m no lawyer or take-out specialist. Let’s hope for the survival of a separate journalistic entity and root for the best. We are living in a period of great upheaval and transition when it comes to how we get our news and who provides it. This is simply a small part of a story writ large.
The real tragedy is that the NH Register certainly could have survived except for catastrophic mismanagement at the corporate level. Ever since the Reagan era, the Register has been buried under debt by its corporate owners. Of course, the wheelers and dealers made sure they were well paid, and the readers be damned.
Pretty sad and I think highly immoral for a parent company to be allowed by law to trade ownership within subsidiaries to avoid debt. Bankruptcy is supposed to make some sense out of a mess, not to let owners off the hook.
It is my understanding that about ten years ago, a group of local people, sympathetic to Yale, should have liked to buy The Register, but could not because the newspaper had profit margins so great, the owner would not sell for an accessible price.
Give Thanks that the Independent doesn’t have to deal with corporate shenanigans like this.
This is what happens when you are owned by a company that could not care less about the product they make or the impact/utility of that product on people in a community. I am going to go out on a limb and guess that the investors and managers of Alden Global Capital almost uniformly make more money per year than the combined salaries of the 10 highest-paid people operating the carcass of the Register.
I hope the Register’s creditors (and present and future retirees) fight this with all the resources they have—Alden Global Capital surely has the money somewhere to pay off their debts, they are just trying to avoid their responsibility while lining their own pockets. Just imagine a guy who looks an awful lot like Mitt Romney cleaning out your pension funds in order to buy a new plane and a 6th house in some charming tax-free land like the Cayman Islands…
posted by: leibzelig on February 21, 2013 2:51pm
The Register and Journal-Courier used to be prize-winning, great local papers. The coverage of the Blizzard of 1978, the two tornadoes, more breaking local news than you can count is in the distant past.
The silly financial moves by the gang that bought the papers from the Jackson family—the St. Louis Sun fiasco for example—put this outfit on a course that could only lead to the financial rocks.
I sincerely hope that those who participated in those halcyon days of journalistic triumph and, like me, are receiving pension payments, are not now targets of cost-cutting by this inept gang.