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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ) In re: ) Chapter 11 ) JOURNAL REGISTER COMPANY, et al.,1 ) Case No. 12-13774 (___) ) Debtors. ) (Joint Administration Requested) )
DECLARATION OF WILLIAM J. HIGGINSON IN SUPPORT OF DEBTORS’ CHAPTER 11 PETITIONS AND FIRST DAY MOTIONS
I, William J. Higginson, hereby deposes and says:
1. I am the Executive Vice President of Operations of Journal Register Company
(“JRC”), a company organized under the laws of the State of Delaware and one of the
above-captioned debtors and debtors in possession (collectively, the “Debtors”). In this capacity,
I am familiar with the Debtors’ day-to-day operations, businesses, financial affairs, and books
and records.
2. On the date hereof (the “Petition Date”), JRC and 28 of its direct and indirect
subsidiaries each filed a voluntary petition for relief under chapter 11 of title 11 of the United
States Code (the “Bankruptcy Code”). The Debtors continue to operate their businesses and
manage their properties as debtors in possession pursuant to §§ 1107(a) and 1108 of the
Bankruptcy Code. Concurrently herewith, the Debtors filed a motion seeking joint
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are: Journal Register Company (8615); Register Company, Inc. (6548); Chanry Communications Ltd. (3704); Pennysaver Home Distributions Corp. (9476); All Home Distribution Inc. (0624); JR East Holdings, LLC (N/A); Journal Register East, Inc. (8039), Journal Company, Inc. (8220); JRC Media, Inc. (4264); Orange Coast Publishing Co. (7866), St. Louis Sun Publishing Co. (1989); Middletown Acquisition Corp. (3035); JiUS, Inc. (3535); Journal Register Supply, Inc. (6546); Northeast Publishing Company, Inc. (6544); Hometown Newspapers, Inc. (8550); The Goodson Holding Company (2437); Acme Newspapers, Inc. (6478); 21st Century Newspapers, Inc. (6233); Morning Star Publishing Company (2543); Heritage Network Incorporated (6777); Independent Newspapers, Inc. (2264); Voice Communications Corp. (0455); Great Lakes Media, Inc. (5920); Up North Publications, Inc. (2784); Greater Detroit Newspaper Network, Inc. (4228); Digital First Media Inc. (0431); Great Northern Publishing, Inc. (0800); and Saginaw Area Newspapers, Inc. (8444). The mailing address for each of the Debtors is Lower Makefield Corporate Center, 790 Township Road, 3rd Floor, Yardley, PA 19067.
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administration of these chapter 11 cases pursuant to Rule 1015(b) of the Federal Rules of
Bankruptcy Procedure (the “Bankruptcy Rules”).
3. I submit this declaration (this “First Day Declaration”) pursuant to Rule 1007 of
the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and Rule 1007-2 of the
Local Bankruptcy Rules for the Southern District of New York (the “Local Rules”) to (i)
provide an overview of the Debtors and these chapter 11 cases (ii) support the Debtors’ chapter
11 petition and “first day” motions (each, a “First Day Motion,” and collectively, the “First Day
Motions”)2 and (iii) to provide certain information required by Local Rule 1007-2. Except as
otherwise indicated herein, all facts set forth in this First Day Declaration are based upon my
personal knowledge of the Debtors’ operations and finances, information learned from my
review of relevant documents, information supplied to me by other members of the Debtors’
management and the Debtors’ advisors, or my opinion based on my experience, knowledge, and
information concerning the Debtors’ operations and financial condition. I am authorized to
submit this First Day Declaration on behalf of the Debtors, and, if called upon to testify, I could
and would testify competently to the facts set forth herein.
I. General Background.
A. Debtors’ Business and Overview.
4. JRC is a national multi-regional, multi-platform media company. Formally
established in 1997, JRC went public in May of that year. The Debtors are committed to being a
customer-focused provider of local news, sports, business and lifestyle information to its
customers on the platforms of the customers’ choice – print and digital. Until a few years ago,
2 All capitalized terms used but otherwise not defined herein shall have the meanings set forth in the relevant First Day Motion.
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the Debtors’ products were predominantly print products. The Debtors’ digital and print titles are
geographically clustered around Greater Philadelphia; Greater Detroit; Connecticut; Greater
Cleveland; and the Capital Saratoga and Mid-Hudson regions of New York State providing its
advertising customers with comprehensive, multi-media solutions, and its online and print
customers with comprehensive local and regional news coverage. The Debtors’ newspapers are
characterized by their intense focus on the coverage of local news and local sports. The Debtors
manage their newspapers to best serve the needs of their local readers and advertisers. The
editorial content of their newspapers is tailored to the specific interests of each local community
served and includes coverage of local youth, high school, college and professional sports, as well
as local business, politics, entertainment and culture.
5. The Debtors pursue a strategy which leverages the power of their print brands to
drive both digital audience and revenue on the media platforms of the customer’s choice while
preserving and enhancing the Debtors’ print products.
6. The Debtors’ print products are geographically clustered. This clustering strategy
creates significant synergies, efficiencies, and cost savings for their print products within each
cluster. These synergies include: (i) increased reach for advertisers; (ii) regional cross-selling of
advertising and promotion and (iii) regionalized news gathering and production efficiencies
through the consolidation of printing, distribution and back-office activities.
7. In response to industry wide challenges, which include the migration of
advertising revenue from print to digital and customers’ increasing preference to access news
digitally, the Debtors in early 2010 increased their investments to meet these challenges. The
Debtors launched a strategy that leveraged the power of their print brands to drive both digital
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audience and revenue on the media platforms of the customer’s choice while preserving and
enhancing the Debtors’ print products.
8. On February 21, 2009, JRC and its then-existing wholly owned subsidiaries each
filed a voluntary petition to reorganize under chapter 11 of the United States Bankruptcy Code in
the Southern District of New York. Upon consummation of their bankruptcy reorganization plan,
the Debtors implemented a significant change in their balance sheet whereby certain of their
outstanding secured and unsecured obligations were compromised and discharged, and new
equity in certain of the reorganized entities was issued to certain of their lenders. JRC emerged
from the chapter 11 proceedings in August 2009.
9. As of the Petition Date, the Debtors employ approximately 1,832 full-time and
525 part-time employees, or approximately 2,107 full-time equivalents. This reflects a decrease
of 25.1 percent from 2009 full-time equivalents. Approximately 23 percent of the Debtors’
employees are employed under collective bargaining agreements. As of the Petition Date, the
Debtors own 41 properties and are the tenants under leases of 34 properties.
10. JRC, the direct or indirect parent of all of the Debtors, leases and occupies a
substantial space at 5 Hanover Square, New York, New York 10005 (“5 Hanover”), which
serves as the “nerve” center for most of the Debtors’ critical operations. JRC has some of its
principal assets located at 5 Hanover, and many of the Debtors’ employees, including their Chief
Executive Officer, John Paton, work full time at 5 Hanover. The Debtors established their
presence at 5 Hanover as part of an effort to consolidate certain key editorial and other services
in one central location. As such, 5 Hanover now serves as the “brains” of the Debtors’ entire
business operations and is, in many respects, the most important asset of the Debtors. In addition,
the Debtors hold themselves out to the general public as being located at 5 Hanover. For
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example, on their website, the Debtors list only two addresses as their “location,” to wit: 5
Hanover and 790 Township Line Road, 3rd Floor, Yardley, Pennsylvania 19067.
11. Moreover, many of the Debtors’ key stakeholders are located or have a presence
in Manhattan—e.g. the Alden Lenders and Wells Fargo, the Debtors’ largest secured creditors,
both have a significant location in Manhattan. Finally, as discussed above, the Debtors prior
chapter 11 cases were administered in the Southern District of New York in 2009, which led to
confirmation of chapter 11 plans by this Court and consummation of such plans thereafter. In
those cases, the Southern District of New York proved to be an appropriate and convenient
venue for the Debtors and all of their stakeholders, and the Debtors believe that it will continue
to be a convenient venue for these cases. Finally, several of the Debtors are incorporated in New
York and have several key assets located in New York State and a significant presence
throughout New York (including four daily and ten nondaily publications in New York, with
over 37,100 paid subscribers and free distribution to 88,000).
B. Newspaper and Digital Operations
12. The Debtors’ digital presence consists of 237 individual websites, 38 smartphone
and digital applications and 19 mobile sites which are affiliated with its daily newspapers and
non-daily publications and its JobsInTheUS network of employment websites, as well as a
number of other online sites. The Debtors’ digital/online objective is to provide multi-platform
media to more fully satisfy the demands of the Debtors’ customers and advertisers for content
and advertising opportunities on the media platforms of their choice.
13. The Debtors own six daily newspapers and 42 non-daily publications serving
areas surrounding Philadelphia, Pennsylvania. These publications include, in Pennsylvania: The
Delaware County Daily and Sunday Times (Primos); The Daily Local News (West Chester); The
Mercury (Pottstown); The Times Herald (Norristown); The Reporter (Lansdale); Montgomery 01:12458908.1 DB1/ 70981563.1 5
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Newspapers, a group of 18 non-daily publications serving Montgomery County; Berks-Mont
Newspapers, a group of five non-daily publications serving Berks and Montgomery counties;
Intercounty Media Group, two publications serving Bucks County, PA and southern New Jersey.
Also, in New Jersey, the Debtors own The Trentonian (Trenton), a daily newspaper operation
focusing on news in New Jersey’s capital and its surrounding communities.
14. The Debtors also own two commercial printing companies in Pennsylvania:
Nittany Valley Offset in State College, Pennsylvania and InterPrint in Bristol, Pennsylvania. JRC
owns and operates an inter-company printing facility, Journal Register Offset in Exton, PA,
which prints 43 of the Debtors’ publications in addition to printing for nonaffiliated customers.
The Debtors’ six Greater Philadelphia daily newspapers have aggregate daily circulation of
125,029 and aggregate Sunday circulation of approximately 119,676. The aggregate non-daily
distribution in the Greater Philadelphia Cluster is approximately 222,890.
15. Each of the Debtors’ titles in the Greater Philadelphia area has a significant digital
presence as well as regional online titles such as www.allaroundphilly.com serving the Greater
Philadelphia Area. Content and sales resources and expenses are shared effectively and
efficiently between the print and the digital titles.
16. In Michigan, the Debtors operate three daily newspapers and 43 non-daily
publications primarily in the Greater Detroit area and other parts of Michigan. The daily
newspapers are The Oakland Press serving Pontiac and the surrounding communities, The
Macomb Daily serving Mt. Clemens and the surrounding communities and The Morning Sun
serving Isabella County. The non-daily publications are primarily aggregated into three groups:
the INI non-daily-group including Voice Newspapers, Advisor Source Newspapers and The
Daily Tribune collectively serving Macomb, St. Clair and Southern Oakland counties; the
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Morning Star Group serving Grand Traverse, Benzie, Alpena and Kalkaska counties; and the
Heritage Newspapers Group serving Wayne and Monroe counties. The aggregate circulation of
the daily newspapers is approximately 127,697 daily and approximately 165,802 Sunday
circulation. The non-daily publications have an aggregate distribution of approximately 671,375.
Each of the Debtors’ publications in the Michigan area has a significant digital presence as well.
Content and sales resources and expenses are shared effectively and efficiently between the print
and digital titles.
17. In Connecticut, the Debtors own The New Haven Register, a small metropolitan
daily newspaper with circulation of approximately 54,630 and Sunday circulation of
approximately 84,169, two suburban daily newspapers and 29 suburban non-daily publications.
Other suburban daily newspapers in the Connecticut Cluster are The Register Citizen
(Torrington) and The Middletown Press (Middletown). These two daily newspapers and The
New Haven Register have aggregate daily circulation of approximately 65,352 and
approximately 95,596 Sunday circulation. The non-daily publications have an aggregate
distribution of approximately 612,918. Included in the non-daily publications is Connecticut
Magazine, the state’s premier lifestyle magazine. The Connecticut daily newspapers and non-
daily publications serve a statewide audience with concentrations in western Connecticut
(Litchfield and Fairfield counties) to Hartford and its suburban areas, to the Greater New Haven
area, as well as the Connecticut shoreline from New Haven northeast to New London. Each of
the Debtors’ titles in Connecticut has a significant digital presence as well. Content and sales
resources and expenses are shared effectively and efficiently between the print and the digital
titles.
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18. The Debtors own two Cleveland, Ohio area daily newspaper operations, The
News Herald (Willoughby) and The Morning Journal (Lorain). The aggregate daily circulation
of the Cleveland area newspapers is approximately 54,355 and aggregate Sunday circulation of
the Cleveland area newspapers is approximately 58,514. The three non-daily publications in the
Greater Cleveland cluster have aggregate distribution of approximately 87,850. Each of the
Debtors’ titles in Cleveland has a significant digital presence as well. Content and sales resources
and expenses are shared effectively and efficiently between the print and digital titles.
19. The Debtors own three daily and eight non-daily publications in the Capital-
Saratoga Region of New York. The Debtors’ daily publications in this area include The Record
(Troy), The Saratogian (Saratoga Springs), The Oneida Daily Dispatch (Oneida), and eight non-
daily publications including the weekly Community News, serving Clifton Park. The daily
newspapers have aggregate daily circulation of approximately 22,858 and aggregate Sunday
circulation of approximately 16,877. The non-daily publications in this cluster have total
distribution of approximately 80,161.
20. The Debtors own one daily newspaper in the Mid-Hudson Region of New York,
The Daily Freeman in Kingston. The Debtors also operate a non-daily Spanish-language
newspaper, Las Noticias, as well as a real estate publication, Doorways. The Mid-Hudson
Region paper has a daily circulation of approximately 14,287, Sunday circulation of
approximately 18,140 and total non-daily distribution of approximately 8,580.
21. Each of the Debtors’ publications in the New York area has a significant digital
presence as well. Content and sales resources and expenses are shared effectively and efficiently
between the print and digital titles.
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C. Revenues.
22. Given the Debtors’ make-up of local and regional print and online titles,
substantially all advertising revenues are derived from a diverse group of local retailers and
classified advertisers rather than national and major account advertising. Historically, local
advertisers had fewer effective advertising vehicles from which to choose. In recent years, the
Debtors have experienced declining total advertising revenues due to the growing digital outlets
available to advertisers and general economic conditions. The newspaper industry, including the
Debtors, have experienced: declining print readership and circulation; declining print advertising
revenues due to alternative media platform choices for customers and advertisers; ongoing
margin pressure; and an ongoing free cash flow decline as print media pricing adapts to a more
digitally-oriented and highly-competitive marketplace. In response to these industry wide
challenges, the Debtors launched a strategy that leveraged the power of their print brands to drive
both digital audience and revenue on the media platforms of the customer’s choice while
preserving and enhancing the Debtors’ print products.
23. In an effort to directly combat recent advertising trends, the Debtors realigned
their sales resources to maximize national, regional and multi-media platform sales. In addition,
they have increased their digital offerings, such as online video, and launched a mobile platform
for content and advertising, and they have entered into sales, content and marketing relationships
to improve its monetizable content, increase their digital audience and revenue through online
revenue-sharing arrangements. Advertising revenues accounted for approximately 66.9 percent
of the Debtors’ total revenues from continuing operations for fiscal year 2011. The Debtors’
advertising rate structures vary among their publications and are a function of various factors,
including advertising effectiveness, local market conditions and competition, as well as
circulation, readership, demographics and type of advertising (whether display, classified or 01:12458908.1 DB1/ 70981563.1 9
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national) and size of digital audience. In fiscal year 2011, local and regional display advertising
accounted for the largest share of the Debtors’ advertising revenues (approximately 34.4
percent), followed by classified advertising (approximately 28.4 percent), preprints
(approximately 19.3 percent), digital advertising (approximately 15.3 percent) and national
advertising (approximately 2.6 percent). The Debtors’ advertising revenues are not reliant upon
any one company or industry, but rather are supported by a variety of companies and industries,
including financial institutions, telecom, realtors, car dealerships, grocery stores, universities,
hospitals and many other local businesses.
24. The Debtors’ circulation revenues are derived from home delivery sales of
publications to subscribers and single-copy sales made through retailers and vending racks as
well as sponsored copies. Circulation from continuing operations accounted for approximately
29.2 percent of the Debtors’ total revenues in fiscal year 2011. Approximately 67.6 percent of
fiscal year 2011 circulation newspaper revenues were derived from subscription sales, which
provide readers with the convenience of home delivery, and are an important component of the
Debtors’ circulation base. Single-copy rates range from $0.50 to $1.00 per daily copy and $1.50
to $2.00 per Sunday copy. The Debtors heavily promote single copy sales of their newspapers,
which comprised 32.4 percent of fiscal year 2011 circulation newspaper revenue, because they
believe that since single copy readers tend to be more active consumers of goods and services,
and such sales have even higher readership than subscription sales. Single copy sales also tend to
generate a higher profit margin than subscription sales, as single copy sales generally have
higher per unit prices and lower distribution costs. As of the Petition Date, the Debtors have a
total daily circulation of approximately 409,578, Sunday circulation of approximately 474,695,
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and non-daily distribution of approximately 1.7 million-most of which is distributed free of
charge.
D. The Debtors’ Prepetition Organizational Structure.
25. In June 2011, certain affiliates of Alden Global Capital Limited (“Alden”)
completed a purchase of the outstanding stock of JRC for $10.00 a share3. The stock of JRC is
currently held by Alden Global Distressed Opportunities Master Fund, L.P. and Alden Global
Value Recovery Master Fund, L.P. The chart attached hereto as Annex A depicts the Debtors’
organizational structure as of the Petition Date.
E. The Debtors’ Prepetition Capital Structure.
26. As of the Petition Date, the Debtors have outstanding debt obligations in the
aggregate principal amount of approximately $162,300,000, consisting primarily of secured debt
incurred in connection with the 2009 exit financing arrangements as the Debtors emerged from
bankruptcy. The Debtors’ primary debt obligations are set forth in three separate agreements –
(a) that certain Loan and Security Agreement (the “Revolving Loan Agreement”); (b) that certain
Term Loan Agreement (Tranche A) (the “Tranche A Loan Agreement”) and (c) that certain
Term Loan Agreement (Tranche B) (the “Tranche B Loan Agreement”).
(i) Revolving Loan Agreement.
27. The Revolving Loan Agreement was entered into on August 7, 2009, by and
among the Debtors as borrowers, and Wells Fargo, National Association (as successor in interest
to Wachovia Bank, National Association) as lender, and consists of (i) a revolving loan with a
maximum borrowing limit of $25,000,000 and (i) the issuance of letters of credit in an amount
3 100% of the stock of JRC had previously been issued to secured lenders pursuant to the confirmed plan of reorganization in the prior chapter 11 cases in August of 2009. Such stock was then sold to Alden in June of 2011.
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not to exceed $13,000,000. The obligations under the Revolving Loan Agreement are secured by
all assets of the Debtors, as set forth in the Revolving Loan Agreement. Pursuant to that
Intercreditor Agreement, dated as of August 7, 2009 (the “Intercreditor Agreement”), with
respect to (i) newsprint inventory, accounts receivables, deposit accounts, general intangibles to
the extent related to inventory, accounts receivable, deposit accounts and the real estate collateral
described in clause (ii), and related assets, subject to certain exceptions as set forth in the
Revolving Loan Agreement and (ii) some real estate collateral (the “Revolving Loan Agreement
Collateral”), the liens securing the obligations under the Revolving Loan Agreement are senior in
priority, operation and effect to those securing the obligations under the Tranche A Loan
Agreement and the Tranche B Loan Agreement. With respect to other collateral, the Revolving
Loan Agreement liens are junior to the Tranche A liens and senior to the Tranche B liens. As of
the Petition Date, $10,057,921 of principal amount is outstanding and $3.2 million in letters of
credit is outstanding under the Revolving Loan Agreement. Currently, there are events of default
existing under the Revolving Loan Agreement.
(ii) Tranche A Loan Agreement.
28. The Tranche A Loan Agreement was entered into on August 7, 2009, by and
among JRC as borrower, JPMorgan Chase Bank, N.A. as administrative agent, and the lenders
party thereto. Pursuant to an amendment to the Tranche A Loan Agreement executed in June
2011 (the “Tranche A 2011 Amendment”), Wells Fargo, National Association became the
administrative agent for the Tranche A Loan Agreement lenders. The Tranche A Term Loan
Agreement consists of a term loan in the original principal amount of $150,000,000. The loans
under the Tranche A Term Loan Agreement are secured by all assets of the Debtors, pursuant to
that certain Guarantee and Security Agreement, dated as of August 7, 2009, by and among JRC,
its subsidiaries as guarantors and Wells Fargo, National Association. Pursuant to the 01:12458908.1 DB1/ 70981563.1 12
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Intercreditor Agreement, with respect to the Revolving Loan Agreement Collateral, the liens
securing the obligations under the Tranche A Loan Agreement are junior in priority, operation
and effect to the liens securing the obligations under the Revolving Loan Agreement. The
Tranche A liens are senior to the Revolving Loan Agreement liens with respect to other
collateral, and are senior to the Tranche B liens with respect to all collateral.
29. Pursuant to the Tranche A 2011 Amendment, Alden Global Distressed
Opportunities Master Fund, L.P. and Alden Global Value Recovery Master Fund, L.P. (the
“Alden Lenders”), made additional loans in the amount of $104,214,695.39 and the Debtors
prepaid the then-existing Tranche A loan obligations (other than those held by the Alden
Lenders) such that the Alden Lenders are now the only remaining lenders under the Tranche A
Loan Agreement. As of the Petition Date, approximately $112.3 million in principal balance
remains outstanding under the Tranche A Loan Agreement. As of the Petition Date, there were
outstanding Event of Defaults under the Tranche A Loan Agreement and a cross-default with the
Revolving Loan Agreement.
(iii) Tranche B Loan Agreement.
30. The Tranche B Loan Agreement was entered into on August 7, 2009, by and
among JRC as borrower, Wells Fargo, National Association as administrative agent and the
lenders party thereto. The Tranche B Term Loan Agreement consists of a term loan in the
original principal amount of $75,000,000. Interest payments may be made entirely in cash or by
increasing the amount of the outstanding loans. The loans under the Tranche B Loan Agreement
are a secured by all assets of the Debtors, pursuant to that certain Guarantee and Security
Agreement, dated as of August 7, 2009, by and among JRC, its subsidiaries as guarantors and
Wells Fargo, National Association. Pursuant to the Intercreditor Agreement, the liens securing
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to the liens securing the obligations under both (i) the Revolving Loan Agreement and (ii) the
Tranche A Loan Agreement.
31. Pursuant to an amendment to the Tranche B Loan Agreement executed in June
2011, the Alden Lenders made additional loans in the amount of $40,470,142.35 and the Debtors
prepaid the then-existing Tranche B loan obligations (other than those held by the Alden
Lenders) such that the Alden Lenders are now the only remaining lenders under the Tranche B
Loan Agreement. As of the Petition Date, approximately $40,000,000 in principal balance
remains outstanding under the Tranche B Loan Agreement. As of the Petition Date, there was an
outstanding Event of Default under the Tranche B Loan Agreement, a cross default due to the
defaults under the Revolving Loan Agreement and the Tranche A Loan Agreement.
II. Events Leading to These Chapter 11 Cases.
32. Since the beginning of 2010, the Debtors have focused on a strategy of growing
and investing in its digital businesses while maintaining as much value as possible from a
declining print business. It is expected that by year end 2012, overall annual operating costs
will have been reduced by $27.0 million, after taking into account $12.8 million in additional
costs associated with digital growth since the beginning of 2010. In addition, since August 2009,
the Debtors have reduced their outstanding debt by 28%. From year-end 2009 through 2011, the
Debtors have grown their digital revenue by 235% compared to a digital growth rate of 18.5%
for the industry during that time frame, with digital revenue growth of 107.7% in 2010, 61.0% in
2011 and 32.5% during the first six months of 2012.
33. Despite its success in digital media growth, the Debtors have been challenged by
a recent downturn in print advertising that was more severe than had been anticipated. In 2010,
newspaper industry print advertising declined 8.2 percent over the previous year. Based on the
2010 second-half trend, the industry expectation for print advertising in 2011 ranged from 01:12458908.1 DB1/ 70981563.1 14
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declines of 4-8 percent. However, the actual industry decline for Full Year 2011 was above that
range at 9.2 percent. Industry print decline projections for 2012 ranged from 4-8 percent, and in
the first quarter of 2012, revenues are 8.2 percent lower than the first quarter of 2011, according
to the Newspaper Association of America (the “NAA”). In total, print advertising from 2009 to
2011 has declined approximately 17% for the newspaper industry, according to the NAA, while
the Debtors’ print advertising has declined 19%. As print advertising revenues represented
56.7% of the Debtors’ total revenues for 2011, these declines have had a significant impact on
the Debtors’ financial results.
34. In addition to the decline in print advertising revenue, the Debtors have been
severely negatively impacted by costs relating to their legacy operations. The Debtors have
substantial lease, tax, trade and pension obligations, which have grown approximately 52% since
2009, relating to their legacy operations that, together with servicing their debt, leave the Debtors
in a position in which their projected cash flow is insufficient to meet their ongoing obligations.
35. The Debtors intend to implement a prompt sale of substantially all of their assets
subject to a public auction process. Currently, an affiliate of Alden has provided purchase terms
that the Debtors believe are in the best interests of their creditors, customers and employees.
However, the Debtors’ financial advisor will be running a marketing process seeking higher or
better competing bids on even more favorable terms, if any, to be obtained at an upcoming
auction. This process is designed to minimize the disruption and time spent in chapter 11 and to
allow the Debtors to continue operating smoothly in the ordinary course of business. The
stalking horse agreement contemplates that the vast majority of the existing unsecured creditors
(including trade and suppliers) will have their claims assumed by the buyer and thus paid in full
in the ordinary course of business. Moreover, the secured lenders of the Debtors (i.e. the Alden
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Lenders and Wells Fargo) have consented to the proposed sale process and, in fact, the sale will
have a significant positive impact on the balance sheet and businesses currently operated by the
Debtors because the Alden Lenders, as stalking horse bidder and holder of the largest secured
debt liability, will be credit bidding its debt in exchange for the assets. After the sale, the
businesses will not be burdened with the extensive secured and other debt and the costs of the
Debtors’ legacy operations, which will make such businesses currently better able to compete
and to weather the current stresses in the industry.
III. Evidentiary Support for First Day Motions.4
36. Concurrently with the filing of the their chapter 11 petitions, the Debtors have
filed a number of First Day Motions seeking relief that the Debtors believe is necessary to enable
them to operate with minimal disruption and loss of productivity. The Debtors request that the
relief requested in each of the First Day Motions be granted as critical elements in ensuring a
smooth transition into, and stabilizing and facilitating the Debtors’ operations during the
pendency of, these chapter 11 cases. I have reviewed each of the First Day Motions discussed
below, and the facts set forth in each First Day Motion are true and correct to the best of my
knowledge and belief with appropriate reliance on corporate officers and advisors.
1. ADMINISTRATIVE MOTIONS
A. Motion for Entry of an Order Directing Joint Administration of ther Debtors’ Related Chapter 11 Cases
37. By this motion (the “Joint Administration Motion”), the Debtors seek entry of an
order directing joint administration of their chapter 11 cases for procedural purposes only. The
Debtors request that the Court maintain one file and one docket for all of the jointly administered
4 Capitalized terms used herein but not otherwise defined shall have the meaning ascribed to them in such motion as set forth below.
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cases under the case number assigned to Journal Register Company and that their chapter 11
cases be administered under a consolidated caption.
38. The Debtors also request that an entry be made on the docket of the Journal
Register Company chapter 11 case that is substantially similar to the following:
An order has been entered in accordance with Rule 1015(b) of the Federal Rules of Bankruptcy Procedure directing joint administration of the chapter 11 cases of Journal Register Company, Digital First Media Inc., Register Company, Inc., Chanry Communications Ltd., Pennysaver Home Distribution Corp., All Home Distribution Inc., JR East Holdings, LLC, Journal Register East, Inc., Journal Company, Inc., JRC Media, Inc., Orange Coast Publishing Co., St. Louis Sun Publishing Co., Middletown Acquisition Corp., JiUS, Inc., Journal Register Supply, Inc., Northeast Publishing Company, Inc., Hometown Newspapers, Inc., The Goodson Holding Company, Acme Newspapers, Inc., 21st Century Newspapers, Inc., Morning Star Publishing Company, Heritage Network Incorporated, Independent Newspapers, Inc., Voice Communications Corp., Great Lakes Media, Inc., Up North Publications, Inc., Greater Detroit Newspaper Network, Inc., Great Northern Publishing, Inc., and Saginaw Area Newspapers, Inc. All further pleadings and other papers shall be filed in, and all further docket entries shall be made in, Case No. 12-______(____).
39. The Debtors also seek authority to file the monthly operating reports required by
the Operating Guidelines and Reporting Requirements for Debtors in Possession and Trustees,
issued by the Office of the United States Trustee for the Southern District of New York, on a
consolidated basis. However, the Debtors intend to track and break out disbursements on a
debtor-by-debtor basis.
40. I have reviewed the Joint Administration Motion and verify that the facts set forth
therein are accurate, and I believe the relief requested in the Joint Administration Motion is in
the best interest of the Debtors’ estates, their creditors, and all other parties in interest, and will
enable the Debtors to continue to operate their businesses in chapter 11 without disruption.
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Accordingly, on behalf of the Debtors, I respectfully submit that the Joint Administration Motion
should be approved.
B. Debtors’ Motion for an Order Authorizing the Debtors to (A) Prepare a List of Creditors in Lieu of a Formatted Mailing Matrix, (B) File a Consolidated List of the Debtors’ 50 Largest Unsecured Creditors and (C) Mail Initial Notices
41. By this motion (the “Consolidation Motion”), the Debtors seek entry of the
Proposed Order authorizing the Debtors to (a) prepare a consolidated list of creditors in the
format or formats currently maintained in the ordinary course of business in lieu of submitting
any required mailing matrix, (b) file a consolidated list of the Debtors’ 50 largest unsecured
creditors, and (c) mail initial notices through the Proposed Claims and Noticing Agent.
42. I have reviewed the Consolidation Motion and verify that the facts set forth
therein are accurate, and I believe the relief requested in the Consolidation Motion is in the best
interest of the Debtors’ estates, their creditors, and all other parties in interest, and will enable the
Debtors to continue to operate their businesses in chapter 11 without disruption. Accordingly, on
behalf of the Debtors, I respectfully submit that the Consolidation Motion should be approved.
C. Debtors’ Motion for an Order Extending the Time to File (I) Schedules of Assets and Liabilities, Schedules of Current Income and Expenditures, Schedules of Executory Contracts and Unexpired Leases and Statements of Financial Affairs and (II) Reports of Financial Information
43. By this motion (the “Extension Motion”), the Debtors seek entry of the Proposed
Order extending the deadline to file (i) the Schedules and Statements for an additional 45 days,
without prejudice to the Debtors’ ability to request additional time should it become necessary,
and (ii) the 2015.3 Reports or to file a motion with the Court seeking a modification of such
reporting requirements until 45 days after the meeting of creditors to be held pursuant to section
341 of the Bankruptcy Code for cause.
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44. I have reviewed the Extension Motion and verify that the facts set forth therein
are accurate, and I believe the relief requested in the Extension Motion is in the best interest of
the Debtors’ estates, their creditors, and all other parties in interest, and will enable the Debtors
to continue to operate their businesses in chapter 11 without disruption. Accordingly, on behalf
of the Debtors, I respectfully submit that the Extension should be approved.
2. OPERATIONAL MOTIONS
A. Debtors’ Motion for Entry of Interim and Final Orders Pursuant to 11 U.S.C. §§ 105, 361, 362, 363, 364 and 507 and Rules 2002, 4001 and 9014 of the Federal Rules of Bankruptcy Procedure (I) Authorizing the Debtors to Incur Postpetition Secured Indebtedness with Priority over Existing Secured Indebtedness and with Administrative Superpriority, (II) Granting Liens, (III) Authorizing the Debtors to Use Cash Collateral Pursuant to 11 U.S.C. § 363 and Providing for Adequate Protection, (IV) Modifying Automatic Stay and (V) Scheduling a Final Hearing
45. By this motion (the “DIP Motion”), the Debtors seek entry of the Interim and
Final Orders, inter alia:
(a) under Bankruptcy Code Sections 363 and 364, authorizing them to obtain
postpetition financing consisting of a revolving credit and letter of credit facility and a
term loan from Wells Fargo under the DIP Credit Agreement, with funds thereunder
available for use in accordance with the terms set forth in the Ratification Agreement,
which generally provides for the following:
i. funding the Debtors’ day-to-day operations and working capital needs in
accordance with the Budget (defined below, a copy of which is attached hereto);
ii. pay over time all outstanding prepetition amounts under the Revolving
Credit Agreement; and
iii. conversion of all existing letters of credit under the Revolving Credit
Agreement into postpetition obligations under the DIP Credit Agreement;
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(b) authorizing the Debtors to enter into and approving the Ratification Agreement
and the other DIP Financing Agreements;
(c) under Bankruptcy Code Section 364(c)(1), and subject to the Carve Out, granting
superpriority claim status to the claims of the DIP Lender under the DIP Financing
Agreements;
(d) under Bankruptcy Code Sections 364(c)(2), (c)(3) and (d), as security for the
repayment of the borrowings and other obligations arising under the DIP Credit
Agreement, authorizing the Debtors to grant to Wells Fargo, as DIP lender under the DIP
Credit Agreement, priming security interests in and liens upon the Collateral, subject to
the Carve Out and specified priority liens;
(e) under Bankruptcy Code Sections 361, 363(c)(2) and 363(e), authorizing the
consensual use by the Debtors in accordance with the Budget of the Prepetition
Collateral, including the Cash Collateral, and to provide adequate protection with respect
to any diminution in the value of the Prepetition Collateral;
(f) under Bankruptcy Code Section 362, modifying the automatic stay to the extent
set forth in the DIP Credit Agreement and the DIP Orders;
(g) pursuant to Bankruptcy Rule 4001, scheduling a preliminary hearing on this
Motion and authorizing the Debtors from the entry of the Interim Order until the Final
Hearing to obtain credit under the terms contained in the DIP Credit Agreement and to
utilize Collateral, including Cash Collateral, on the terms set forth in the Interim Order;
and
(h) pursuant to Bankruptcy Rule 4001, scheduling a Final Hearing on this Motion and
establishing notice procedures in respect of the Final Hearing by this Court to consider
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entry of the Final Order authorizing the Debtors to borrow the balance of the DIP Credit
Facility on a final basis.
46. I have reviewed the DIP Motion and verify that the facts set forth therein are
accurate, and I believe the relief requested in the DIP Motion is in the best interest of the
Debtors’ estates, their creditors, and all other parties in interest, and will enable the Debtors to
continue to operate their businesses in chapter 11 without disruption. Accordingly, on behalf of
the Debtors, I respectfully submit that the DIP Motion should be approved.
B. Motion for Entry of Interim and Final Orders (A) Authorizing, but not Directing, the Debtors to Pay Certain Pre-Petition Wages, Compensation and Employee Benefits and Continue Payment of Wages, Compensation and Employee Benefits in the Ordinary Course of Business; and (B) Authorizing and Directing Applicable Banks and Other Financial Institutions to Process and Pay All Checks Presented for Payment and to Honor All Funds Transfer Requests Made by the Debtors Relating to the Foregoing
47. By this motion (the “Employee Wage Motion”), the Debtors seek entry of interim
and final orders (i) authorizing (but not directing) them to pay, in their sole discretion, the pre-
petition Employee Obligations as described in the Employee Wage Motion and all costs incident
thereto; (ii) authorizing (but not directing) the Debtors to continue to honor their practices,
programs and policies with respect to the Employees, including ADP administration as such
practices, programs and policies were in effect as of the Petition Date, with authorization (but not
direction) to pay the Employee Obligations that become due and owing during the pendency of
these cases; (iii) authorizing (but not directing) the Debtors to pay, in their sole discretion, all
payments as of the petition date due and owing in connection with Employee Expense
Obligations, and to continue to make any payments occurring in the ordinary course of business,
including any such payments to Amex and (iv) authorizing and directing Disbursement Banks to
receive, process and pay any and all checks drawn on the Debtors’ accounts and automatic
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transfers to the extent that such checks or transfers relate to any of the foregoing. This Motion is
intended only to permit the Debtors, in their discretion, to make payments consistent with those
pre-petition policies to the extent that, without the benefit of an order approving this Motion,
such payments would be inconsistent with the Bankruptcy Code.
48. Preservation of the value of the estates depends upon a stable work force. Thus,
any significant number of Employee departures or deterioration in morale at this time will
substantially and adversely impact the Debtors’ business and result in immediate and irreparable
harm to the estates and their creditors. There is a real, immediate risk that if the Debtors are not
authorized to continue to satisfy Employee Obligations in the ordinary course, Employees would
no longer support and maintain the operations of the Debtors, thereby crippling the Debtors’
business operations and instantly destroying the prospects of realizing maximum value for the
Debtors’ assets. Consequently, it is critical that the Debtors continue, in their ordinary course,
personnel policies, programs and procedures that were in effect prior to the Petition Date, except
as otherwise set forth in the Employee Wage Motion, for all of their Employees.
49. I have reviewed the Employee Wage Motion and verify that the facts set forth
therein are accurate, and I believe the relief requested in the Employee Wage Motion is in the
best interest of the Debtors’ estates, their creditors, and all other parties in interest, and will
enable the Debtors to continue to operate their businesses in chapter 11 without disruption.
Accordingly, on behalf of the Debtors, I respectfully submit that the Employee Wage Motion
should be approved.
C. Motion for Entry of Interim and Final Orders Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code and Bankruptcy Rule 6003 Authorizing Debtors to Continue Insurance Policies and Agreements Relating Thereto and to Honor Certain Prepetition Obligations in Respect Thereof
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50. By this motion (the “Insurance Motion”), the Debtors seek entry of interim and
final orders authorizing them, to maintain the Insurance Policies, as defined in the Insurance
Motion and to make certain premium, deductible and other payments in their discretion with
respect to the Insurance Policies, on an uninterrupted basis, in accordance with the Debtors’
prepetition practices, including with respect to Insurance Policies that will expire by their terms
in the early weeks of these chapter 11 cases.
51. In connection with the operation of their respective businesses, the Debtors
maintain various insurance programs, including those providing coverage for liability related to
workers’ compensation, property damage, automobile use and directors and officers through
different insurance carriers. Continued maintenance of the Insurance Policies serves to preserve
the value of the Debtors’ estates. The nonpayment of any premiums, deductibles, or related fees
in connection with the Debtors’ obligations in connection with the Insurance Policies could
result in one or more of the Insurance Carriers cancelling an existing policy and/or declining to
renew their insurance policies. If the Debtors’ insurance is allowed to lapse, the Debtors could
be exposed to substantial liability for damages resulting to persons and property of the Debtors
and others, which exposure could have an extremely negative impact on the Debtors’ estates.
Furthermore, the Debtors would then be required to obtain replacement policies on a highly
expedited basis at a potentially significant cost to the estate. Accordingly, the Debtors
respectfully request that they be authorized to make all payments in respect of their insurance
obligations currently due and going forward.
52. I have reviewed the Insurance Motion and verify that the facts set forth therein are
accurate, and I believe the relief requested in the Insurance Motion is in the best interest of the
Debtors’ estates, their creditors, and all other parties in interest, and will enable the Debtors to
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continue to operate their businesses in chapter 11 without disruption. Accordingly, on behalf of
the Debtors, I respectfully submit that the Insurance Motion should be approved.
D. Debtors’ Motion for Entry of an Interim and Final Order Authorizing the Debtors to Continue to Honor Customer Programs in the Ordinary Course of Business
53. By this motion (the “Customer Programs Motion”), the Debtors seek the entry of
interim and final orders authorizing them to temporarily continue the Customer Programs in the
ordinary course of business. In the ordinary course of business and as is customary in the
newspaper industry, the Debtors engage in certain activities to develop and sustain a positive
reputation and relationship with their customers, advertisers and vendors to effectively promote
their newspapers and online presence. To that end, the Debtors have implemented various
customer programs and policies designed to ensure customer satisfaction, increase sales,
maintain customer loyalty, improve profitability, and generate goodwill for the Debtors and their
products.
53. The Customer Programs, which include, among others, reimbursements related to
prepaid advertising and subscriptions, and adjustments for advertising and billing errors, are
commonplace in the Debtors’ industry and among the Debtors’ competitors. The universal goals
of the Customer Programs are to meet competitive pressures, maximize sales, ensure customer
satisfaction, and generate brand loyalty and goodwill for the Debtors, thereby retaining current
customers, attracting new ones and ultimately enhancing net revenue.
54. I have reviewed the Customer Program Motion and verify that the facts set forth
therein are accurate, and I believe the relief requested in the Customer Program Motion is in the
best interest of the Debtors’ estates, their creditors, and all other parties in interest, and will
enable the Debtors to continue to operate their businesses in chapter 11 without disruption.
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Accordingly, on behalf of the Debtors, I respectfully submit that the Customer Program Motion
should be approved.
E. Debtors’ Motion for Entry of an Interim and Final Order (A) Authorizing the Debtors to (I) Continue Use of Existing Cash Management System, Bank Accounts and Business Forms and (II) Authorizing Debtors to Open New Debtors-in-Possession Accounts, and (B) Extending the Debtors’ Time to Comply With Section 345(b) of the Bankruptcy Code
54. By this motion (the “Cash Management Motion”), the Debtors seek entry of
interim and final orders authorizing them to: (a) continue to use their Cash Management System,
Bank Accounts and business forms, (b) treat the Bank Accounts for all purposes as accounts of
the Debtors as debtors-in-possession; (c) if appropriate, open new debtor-in-possession accounts
and/or close any existing accounts, provided that the Debtors give prior notice to the Office of
the United States Trustee for the Southern District of New York and any official committees
appointed in these chapter 11 cases; and (d) use, in their present form, all correspondence and
business forms (including, without limitation, letterhead, purchase orders and invoices), and
documents related to the Bank Accounts, existing immediately before the Petition Date, without
reference to their status as debtors-in-possession.
55. The Debtors further request that the Court authorize and direct the Cash
Management Banks to, subject to the Account Control Agreements and the Proposed Cash
Collateral Order: (i) continue to maintain, service and administer such accounts, and (ii) debit the
Debtors’ accounts in the ordinary course of business on account of: (a) all checks drawn on the
Debtors’ accounts that are cashed at the Cash Management Banks or exchanged for cashier’s
checks by the payees, thereof, prior to the Petition Date; (b) all checks or other items deposited
in one of the Debtors’ accounts with the Cash Management Banks prior to the Petition Date that
have been dishonored or returned unpaid for any reason, together with any fees and costs in
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connection therewith, to the same extent that the Debtor was responsible for such items prior to
the Petition Date; and (c) all undisputed prepetition amounts outstanding as of the date hereof, if
any, owed to the Cash Management Banks as service charges for the maintenance of the Cash
Management System.
56. I have reviewed the Cash Management Motion and verify that the facts set forth
therein are accurate, and I believe the relief requested in the Cash Management Motion is in the
best interest of the Debtors’ estates, their creditors, and all other parties in interest, and will
enable the Debtors to continue to operate their businesses in chapter 11 without disruption.
Accordingly, on behalf of the Debtors, I respectfully submit that the Cash Management Motion
should be approved.
F. Motion for Interim and Final Orders Authorizing the Debtors to Pay Prepetition Sales and Use Taxes and Related Obligations
57. By this motion (the “Tax Motion”), the Debtors seek entry of interim and final
orders authorizing the payment of certain prepetition sales and use taxes and related obligations
owed to various taxing authorities.
58. In the ordinary course of business, the Debtors are required to collect the Sales
Taxes from purchasers of their products and periodically remit the Sales Taxes to the applicable
Taxing Authorities. Typically, Sales Taxes accrue as products are sold, and such taxes are
calculated based on a statutory percentage of the sale price. The statutory percentage required to
be withheld by each of the Debtors varies by the state and county in which the Debtors operate.
The process by which the Debtors remit the Sales Taxes also varies, depending on the nature of
the tax and the Taxing Authority to be paid. Most Taxing Authorities require that the Sales
Taxes be remitted monthly, whereas others require quarterly or semi-annual remittances. The
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frequency required by a Taxing Authority is generally dependent upon the level of sales volume
within that Taxing Authority’s jurisdiction.
59. The Debtors also incur use taxes. The Debtors’ liability for Use Taxes arises
from purchases of fixed assets, supplies or signage without sales tax.
60. The Debtors traditionally remit Sales Taxes and Use Taxes by mailing physical
checks or ACH electronic transfers. As of the Petition Date, the Debtors estimate that
approximately $20,000 in Sales Taxes and Use Taxes relating to the prepetition period will be
due and owing to the Taxing Authorities in the ordinary course of business. The Debtors seek
authority to pay all prepetition obligations in respect of the Taxes owed to the Taxing
Authorities, as further set forth in the Proposed Interim Order. The Debtors estimate that
payments made pursuant to the relief requested herein will not exceed $20,000. In addition, to
the extent that any checks, drafts, deposits or transfers issued or initiated by the Debtors on
account of Taxes have not cleared as of the Petition Date, the Debtors also seek an order
directing banks and other financial institutions to honor and process such payments.
61. I have reviewed the Tax Motion and verify that the facts set forth therein are
accurate, and I believe the relief requested in the Tax Motion is in the best interest of the
Debtors’ estates, their creditors, and all other parties in interest, and will enable the Debtors to
continue to operate their businesses in chapter 11 without disruption. Accordingly, on behalf of
the Debtors, I respectfully submit that the Tax Motion should be approved.
G. Motion for Entry of Interim and Final Orders Authorizing Payment of Prepetition Claims of Shippers and Other Lien Claimants, and Granting Related Relief
62. By this motion (the “Shippers Motion”), the Debtors seek entry of the Proposed
Orders granting the Debtors the authority to: (A) continue to pay, in the ordinary course of
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business, the prepetition claims of shippers and lien claimants; and (B) have financial institutions
honor and pay all related checks and transfers; provided, however, that within 21 days after the
Petition Date, the Debtors will only pay the Claims described below to the extent the Debtors
determine, in the exercise of their business judgment, that such payment is necessary to avoid
immediate and irreparable harm to the Debtors; provided, further, that in no event shall the
Debtors pay any Claims described herein before such amounts are due and payable.
63. The Debtors’ operations necessarily depend on an extensive shipping and
distribution network as they move newspapers and Products to and from their printing,
processing and distribution centers to customers, both large and small, in the markets in which
they operate. The Debtors’ operations rely on common carriers for reliable and timely transport
and delivery of date sensitive pre-printed advertising materials to be inserted into the Debtors’
daily and Sunday newspapers. As such, the Debtors’ business necessitates the coordination of,
and reliance upon the Shippers.
64. In the aggregate, the Debtors operate a combined fleet of more than 195 vans,
trucks and other delivery vehicles to deliver the Products throughout their key markets.
65. The Debtors hire Shippers to transport, store and deliver the Products to the
Debtors’ distribution centers and other various facilities.
66. The Debtors have carefully cultivated a reputation for reliability and
dependability among their customers. Many of the Debtors’ pricing policies and marketing
strategies revolve around their ability to meet individual customer needs on a timely, dependable
and often custom-tailored basis. This reputation, in turn, depends on the ability to timely deliver
the Debtors’ product to their customers who all rely on the Debtors’ efficient and reliable
service.
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67. The Debtors accordingly must maintain a reliable and efficient supply and
distribution network during the pendency of these chapter 11 cases. If the Debtors’ facilities do
not receive delivery of products and newspapers when scheduled, and the Debtors’ customers are
unable to receive Products, the Debtors’ operations will be severely and adversely affected, and
production may even be stopped. As a result, the Debtors may suffer, at a minimum, a
significant loss of credibility and customer goodwill as well as revenue, thereby causing
substantial and potentially irreparable harm to their businesses and the value of their estates.
68. At any given time, and from time to time, the Debtors engage approximately four
Shippers to ensure a smoothly functioning delivery network. As of the Petition Date, the
Debtors estimate that the Shipper Claims total no more than $16,000, collectively, and other
similarly situated potential Lien Claimants
69. The Debtors will, in their discretion, attempt to condition any payment on account
of a Claim on the written acknowledgment from the applicable Shipper or Lien Claimant that it
will continue to provide its services to the Debtors on trade terms that, at a minimum, such
Shipper or Lien Claimant provided to the Debtors in the six months prior to the Petition Date, or
such other trade practices and programs that are at least as favorable to the Debtors as those in
effect prior to the Petition Date. Furthermore, the Debtors reserve the right to negotiate more
favorable trade terms with any Shipper or Lien Claimant as a condition to payment of its Claim.
70. The Debtors will only pay those Claims that they believe, in their business
judgment, are necessary or appropriate. The Debtors submit that the total amount to be paid to
the Shippers and Lien Claimants on account of their prepetition claims is minimal compared to
the direct and indirect losses the Debtors would suffer if a Shipper or Lien Claimant refused to
deliver products and newspapers.
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71. The Debtors’ business operations and reorganization efforts depend on a reliable
and efficient supply and distribution network. Because the Debtors rely on third parties for the
delivery of goods to their customers, it is essential that their bankruptcy cases not provide a
reason or excuse for any such party to cease timely provision of its services. If the Debtors are
unable to produce their Products, or if the Debtors’ customers are unable to receive such
Products on a timely and uninterrupted basis, the Debtors will likely suffer a significant loss of
revenue and market share, thereby causing irreparable harm to their businesses and the value of
their estates.
72. I have reviewed the Shippers Motion and verify that the facts set forth therein are
accurate, and I believe the relief requested in the Shippers Motion is in the best interest of the
Debtors’ estates, their creditors, and all other parties in interest, and will enable the Debtors to
continue to operate their businesses in chapter 11 without disruption. Accordingly, on behalf of
the Debtors, I respectfully submit that the Shippers Motion should be approved.
3. RETENTION APPLICATIONS
A. Application For an Order Appointing American Legal Claim Services, LLC as Claims, Balloting and Noticing Agent for the Debtors Pursuant to 28 U.S.C. § 156(c), 11 U.S.C. § 105(a), S.D.N.Y. LBR 5075-1 and General Order M-409
73. By this application (the “ALCS Application”), the Debtors request entry of an
order appointing American Legal Claim Services, LLC (“ALCS”) to act as the Agent in order to
assume responsibility for the distribution of notices and the maintenance, processing, and
docketing of proofs of claim filed in the Debtors’ cases. The Debtors’ selection of ALCS to act
as the Agent has satisfied the Court’s Protocol for the Employment of Claims and Noticing
Agents under 28 U.S.C. § 156(c), in that the Debtors have obtained and reviewed engagement
proposals from at least two (2) other court-approved claims and noticing agents to ensure
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selection through a competitive process. Moreover, the Debtors submit, based on all engagement
proposals obtained and reviewed, that ALCS’s rates are competitive and reasonable given
ALCS’s quality of services and expertise. The terms of retention are set forth in the Engagement
Agreement annexed to the ALCS Application; provided, however, that ALCS is seeking
approval solely of the terms and provisions as set forth in the ALCS Application and the
proposed order attached hereto.
74. Although the Debtors have not yet filed their schedules of assets and liabilities,
they anticipate that there will be thousands of entities to be noticed. In view of the number of
anticipated claimants and the status of the Debtors’ businesses, the Debtors submit that the
appointment of a claims and noticing agent is both necessary and in the best interests of both the
Debtors’ estates and their creditors.
75. By appointing ALCS as the Agent in these cases, the distribution of notices and
the processing of claims will be expedited, and the clerk’s office will be relieved of the
administrative burden of processing what may be a large number of claims.
76. I have reviewed the ALCS Application and verify that the facts set forth therein
are accurate, and I believe the relief requested in the ALCS Application is in the best interest of
the Debtors’ estates, their creditors, and all other parties in interest, and will enable the Debtors
to continue to operate their businesses in chapter 11 without disruption. Accordingly, on behalf
of the Debtors, I respectfully submit that the ALCS Application should be approved.
INFORMATION REQUIRED BY LOCAL BANKRUPTCY RULE 1007-2
77. Local Bankruptcy Rule 1007-2 requires certain information related to the Debtors,
which I have provided in the exhibits attached hereto as Exhibit A through Exhibit L.
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Specifically, these exhibits contain the following information with respect to the Debtors on a
consolidated basis), unless otherwise noted:5
Pursuant to Local Bankruptcy Rule 1007-2(a)(3), Exhibit A hereto provides the names and addresses of the members of, and attorneys for, any committee organized prior to the order for relief in the chapter 11 cases, and a brief description of the circumstances surrounding the formation of the committee and the date of formation.
Pursuant to Local Bankruptcy Rule 1007-2(a)(4), Exhibit B hereto provides the following information with respect to each of the holders of the Debtors’ 50 largest unsecured claims, excluding the claims of insiders: the creditor’s name; the address (including the number, street, apartment, or suite number, and zip code, if not included in the post office); the telephone number; the name(s) of person(s) familiar with the Debtors’ account; the nature and approximate amount of the claim; and an indication of whether the claim is contingent, unliquidated, disputed, or partially secured.
Pursuant to Local Bankruptcy Rule 1007-2(a)(5), Exhibit C hereto provides the following information with respect to each of the holders of the five largest secured claims against the Debtors: the creditor’s name; address (including street number, street, apartment or suite number, and zip code, if not included in the post office address); the amount of the claim; a brief description of the claim; an estimate of the value of the collateral securing the claim; and an indication of whether the claim or lien is disputed at the time.
Pursuant to Local Bankruptcy Rule 1007-2(a)(6), Exhibit D hereto provides a summary of the Debtors’ assets and liabilities.
Pursuant to Local Bankruptcy Rule 1007-2(a)(7), Exhibit E hereto provides a summary of the publicly held securities of the Debtors.
5 The information contained in the Exhibits attached to this Declaration shall not constitute an admission of liability by, nor is it binding on, the Debtors. The Debtors reserve all rights to assert that any debt or claim listed herein is a disputed claim or debt, and to challenge the priority, nature, amount, or status of any such claim or debt. The descriptions of the collateral securing the underlying obligations are intended only as brief summaries. In the event of any inconsistencies between the summaries set forth and the respective corporate and legal documents relating to such obligations, the descriptions in the corporate and legal documents shall control.
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Pursuant to Local Bankruptcy Rule 1007-2(a)(8), Exhibit F hereto provides the following information with respect to any property in possession or custody of any custodian, public officer, mortgagee, pledge, assignee or rents, or secured creditors, or agent for such entity: the name; address; and telephone of such entity and the court in which any proceeding relating thereto is pending. Pursuant to Local Bankruptcy Rule 1007-2(a)(9) Exhibit G hereto provides a list of the property comprising the premises owned, leased, or held under other arrangement from which the Debtors operate their business.
Pursuant to Local Bankruptcy Rule 1007-2(a)(10) Exhibit H hereto sets forth the location of the Debtors’ substantial assets, the location of their books and records, and the nature, location, and value of any assets held by the Debtors outside the territorial limits of the U.S.
Pursuant to Local Bankruptcy Rule 1007-2(a)(11), Exhibit I hereto provides a list of the nature and present status of each action or proceeding, pending or threatened, against the debtors or their property where a judgment or seizure of their property may be imminent.
Pursuant to Local Bankruptcy Rule 1007-2(a)(12), Exhibit J hereto sets forth a list of the names of the individuals who comprise the Debtors’ existing senior management, their tenure with the Debtors, and a brief summary of their relevant responsibilities and experience.
Pursuant to Local Bankruptcy Rule 1007-2(b)(1)-(2)(A), Exhibit K hereto provides the estimated amount of payroll to the Debtors’ employees (not including officers, directors, and equity holders) and the estimated amounts to be paid to officers, equity holders, directors, and financial and business consultants retained by the Debtors, for the 30-day period following the Petition Date.
Pursuant to Local Bankruptcy Rule 1007-2(b)(3), Exhibit L hereto provides a schedule, for the 30-day period following the Petition Date, of estimated cash receipts and disbursements, net cash gain or loss, obligations and receivables expected to accrue but remain unpaid, other than professional fees, for the 30-day period following the filing of the chapter 11 cases, and any other information relevant to an understanding of the foregoing.
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EXHIBIT A
Committees Organized Prior to Order for Relief
No ad hoc committees of creditors were formed prior to the Petition Date.
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EXHIBIT B
50 Largest Unsecured Claims
Rank Name of creditor Name, telephone number and complete Nature of claim Indicate if Amount of mailing address, including zip code, of (trade debt, claim is claim employee, agent, or department of bank loan, contingent, creditor familiar with claim who may be government unliquidated, contacted contract, etc.) disputed or subject to setoff1 1 State of Connecticut p. (860) 808-5150 Tax Claim $4,339,349.25 attn: Dennis S. Mondell Settlement 55 Elm Street, P.O. Box 120 Hartford, CT 06141 2 Journal Register p. Pension $3,200,000.00 Company Retirement f. Contribution Plan Trust e. attn:BNY Mellon Asset Servicing 135 Santilli Highway Everett, MA 02149 3 Kruger Inc. p. (203) 364-1687 Trade $402,709.22 f. (514) 343-3126 e. [email protected] P.O. Box 71455 Chicago, IL 60694-1455 4 Affinity Express, Inc p. (847) 930-3200 Trade $300,091.33 f. e. Department 4397 Carol Stream, IL 60122-4397 5 White Birch Paper p. (203) 661-3344 Trade $261,213.50 Company f. e. PO Box 79443 Baltimore, MD 06830 6 Full Throttle Digital p. Trade $216,900.00 Media f. e. 5525 W Olympic Blvd Suite 301 Los Angeles, CA 90036 7 Monster Worldwide, p. (800) 666-7837 Trade $186,041.05 Inc Dba monster f. e. P.O. Box 416803 Boston, MA 02241-6803
1 The Debtors reserve their rights to dispute the claims on this schedule on any basis.
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8 Xpedx p. (888) 863-9769 (888) 973-3978 Trade $110,718.87 f. e. PO Box 644520 Pittsburgh, PA 15264-4520 9 Carey,Kramer,Pettit,Pa p. (610) 341-0200 Rent $107,542.92 nichelli & Assoc. f. (610) 341-0260 e. PO Box 824435 Philadelphia, PA 19182-4435 10 CDW Direct LLC p. (800) 800-4239 Trade $104,671.79 f. (847) 465-6800 e. [email protected] Attn: Credit 200 N Milwaukee Vernon, IL 60061 11 City of Mount p. (586) 469-6818 ext. 1 Utility $96,632.19 Clemens-Treas f. (586)-469-7603 e. [email protected] 1 Crocker Blvd Mount Clemens, MI 48043-2525 12 Sun Chemical A p. (973) 404-6000 Trade $86,269.45 Division of US Ink C f. (973)-404-6001 e. PO Box 2193 Carol Stream, IL 60132-2193 13 Montgomery, p. (215) 772-1500 Legal $77,032.53 Mccracken, Walker& f. (215) 772-7620 Rhoads, Llp e. [email protected] 123 South Broad Philadelphia, PA 19109-1099 14 Flint Group North p. (734) 781-4600 Trade $73,834.94 American Corporat f. (734) 781-4699 e. 1455 Paysphere Circle Chicago, IL 60674 15 Publishers Circulation p. (410) 821-8614 Trade $59,977.41 Fulfillment f. e. [email protected] 22 W Pennsylvania Ave Suite 505 Towson, MD 21204 16 AT&T Mobility p. (404)236-6000 Utility $54,747.67 f. e. PO Box 6463 Carol Stream, IL 60197-6463 17 Saxotech Inc p. (813) 221-1600 Trade $52,692.90 f. (813) 221-1604 e. [email protected] 302 Knights Run Avenue Suite 1150 Tampa, FL 33602
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18 XO Communications p. 703-547-2000 Utility $52,182.90 Services f. e. 14239 Collections Center Chicago, IL 60693 19 Southern Lithoplate p. Trade $51,040.00 Inc f. 919-554-0786 e. [email protected] PO Box 741887 Atlanta, GA 30374-1887 20 G.E. Richards Graphic p. 717.898.3151 Trade $50,563.09 Supply f. e. [email protected] PO Box 339 Landisville, PA 17538 21 Jams Media, LLC p. 810-245-9343 Trade $50,155.36 f. 810-245-9375 e. [email protected] 10450 Enterprise Drive Davisburg, MI 48350 22 Keilhauer p. 800-724-5665 Trade $46,760.87 f. 416-759-5723 e. Dept CH 17170 Palatine, IL 60055-7170 23 AGFA Corp p. 800.540.2432 Trade $41,862.30 f. 201.440.6794 e. PO Box 2123 Carol Stream, IL 60132-2123 24 United Illuminating p. 800-442-5004 Utility $41,619.32 Co. f. 203-499-2411 e. Attn: Jim Piergrossi PO Box 9230 Chelsea, MA 02150-9230 25 Gallagher Fiduciary p. 215.545.6000 Consulting $35,000.00 Advisors LLC f. 215.557.4525 e. PO Box 71396 Chicago, IL 60694-1396 26 PDI Plastics, Cannon p. 800-634-0017 Trade $34,528.32 Group, Inc. f. 614-890-0467 e. [email protected] PO Box 635994 Cincinnati, OH 45263-5994 27 Mt Pleasant Commerce p. (262) 938-4449 Rent $30,285.00 Center LLC f. e. [email protected] PO Box 503 Mt Pleasant, MI 48804-0503
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28 Ouky Property, LLC p. Rent $30,125.00 f. e. 13704 Ironwood Dr Shelby Twp, MI 48315 29 Legacy.com Inc p. (847) 864-4497 Trade $28,970.90 f. 888-397-3366 e. 820 Davis Street #210 Evanston, IL 60201 30 Gabriels Technology p. 212-741-0700 x115 Trade $28,350.00 Solutions f. e. [email protected] 1250 Broadway FL 28 New York, NY 10001-3721 31 Competitive Media p. Trade $28,305.00 Reporting LLC f. e. [email protected] PO BOX 7247-9301
Philadelphia, PA 19170-9301 32 The Lane Press, Inc. p. 800-733-3740 Trade $27,753.92 f. 802-264-1485 e. P.O. Box 130
Burlington, VT 05402-0130 33 Accountemps p. 215.568.4580 Trade $26,570.10 f. 215.564.1968 e. [email protected] Robert Half 12400 Collectio Chicago, IL 60693 34 Email Predict LLC p. 212.627.3439 Consulting $25,605.67 f. 212.208.4374 e. 217 Water Street 3rd Floor New York, NY 10038 35 Autoproyecto LLC p. Trade $25,547.00 f. e. 5525 West Olympic Blvd #3 Los Angeles, CA 90036 36 Atex Inc p. 781-685-3240 Trade $23,127.20 f. 978-851-5058 e. [email protected] 410 North Wickham Rd #100 Melbourne, FL 32935 37 Merrill Lynch, Pierce, p. Benefit Plan $23,055.65 Fenner & Smith f. 401(K) e. Retirement Group PO Box 1507 Pennington, NJ 08534
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38 Font Bureau p. 617.423.8770 Trade $22,080.00 f. 617.423.8771 e. [email protected] 179 South St 7th Floor Boston, MA 02210 39 Seyfarth & Shaw p. (212) 218-5269 Legal $22,038.16 f. (212) 218-5526 e. [email protected] 3807 Collections Center D Chicago, IL 60693 40 Tristaff Search p. 858-453-1331 Trade $20,833.00 f. 858-453-6022 e. [email protected] 6336 Greenwich Dr #100 San Diego, CA 92122 41 Illuminating Company p. 800-589-3101 Utility $20,723.36 f. e. PO Box 3638 Akron, OH 44309-3638 42 Travidia p. (530) 343-6400 Trade $20,464.00 f. (530) 892-9369 e. [email protected] 265 Airpark Blvd #500 Chico, CA 95973 43 McGrann Paper Corp p. (800)240-9455 Trade $19,669.96 f. e. PO BOX 713173 Cincinatti, OH 45271-3173 44 ADP Inc p. 800-225-5237 Trade $19,645.46 f. e. support.adp.com PO Box 7247-0372 Philadelphia, PA 19170-0372 45 DeNardo Consulting p. 805-340-7359 Consulting $19,638.97 Group f. 310-514-1607 e. [email protected] 34 Surfspray Bluff Newport Coast, CA 92657 46 One Heritage Place p. 298-372-2272 Rent $19,262.04 LLC f. 248-357-2508 e. C/O Grubb & Ellis Managem Attn: Accounts Southfield, MI 48076 47 AppVault LLC p. 888.469.2490 Trade $18,520.00 f. e. [email protected] 1800 Parkway Place #1000 Marietta, GA 30067
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48 The Post-Standard p. 315-470-0011 Trade $18,143.51 f. e. [email protected] PO Box 4915 Syracuse, NY 13221 49 Salesforce.com, Inc p. 800-667-6389 Trade $17,850.00 f. e. PO Box 203141 Dallas, TX 75320-3141 50 Minute Men, Inc. p. (877) 873-8856 Trade $17,368.81 f. e. [email protected] PO Box 715237
Columbus, OH 43271-5237
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EXHIBIT C
Holders of Five Largest Secured Claims against the Debtors
Creditor Address Amount Nature of Collateral C/U/D Interest 1. Alden 885 Third $152,300,000.00 Secured loan All assets of Undisputed Lenders Avenue, 34th in connection Journal Floor with Term Register New York, Loan A and Company NY 10022 Term Loan B and its Debt affiliates 2. Wells 100 Park $13,232,921.00 Secured loan All assets of Undisputed Fargo, Avenue, NY in connection Journal National NY 10017 with Register Association Revolving Company Loan and its Agreement affiliates and related Letter of Credit 3. Tax 70 West $195.46 Tax Lien All Undisputed Collector, River Street, machinery, Milford Milford, CT furniture and Connecticut 06460 equipment owned by Journal Register East, Inc. 4. Town of 41 West Unknown Tax Lien All furniture, Undisputed Cromwell Street, (referenced on fixtures and Tax Office Cromwell, Connecticut equipment of CT 06416 UCC statement Journal #0002868960) Register East, Inc.
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EXHIBIT D
JOURNAL REGISTER COMPANY and SUBSIDIARIES SUMMARY OF DEBTORS' ASSETS AND LIABILITIES
(unaudited) July 29, December 25, (in thousands, except share data) 2012 2011 Assets Current assets: $ $ Cash and cash equivalents 1,530 2,766
Accounts receivable, net of allowance for doubtful accounts 24,412 29,107
Inventories 2,715 3,834
Deferred income taxes - current 2,946 2,946
Other current assets 5,628 5,583
Total current assets 37,231 44,236
Property, plant and equipment, net of accumulated depreciation 103,202 105,998
Goodwill 49,026 49,026
Other intangibles, net 36,218 39,758
Other assets 9,370 8,280 $ $ Total assets 235,047 247,298
Liabilities and Stockholders' Equity (Deficit) Current liabilities: $ $ Current portion of bank debt 17,290 8,981
Current portion of tax settlement 2,778 2,591
Current portion of capital leases 335 326
Accounts payable 8,711 7,260
Accrued interest 2,352 3,813
Deferred subscription revenue 12,581 12,636
Other accrued expenses and current liabilities 22,371 23,322
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Total current liabilities 66,418 58,929
Bank debt - noncurrent 141,856 148,637
Tax settlement liability - noncurrent 1,780 3,441
Capital lease obligations - noncurrent 644 841
Deferred income taxes 8,772 8,796
Accrued retiree benefits and other liabilities 49,125 51,542
Total liabilities 268,595 272,186
Stockholders' equity (deficit)
Preferred stock - 10,000,000 shares authorized, none issued and outstanding - - Common Stock - Class A, $0.01 par value, 10,000,000 shares authorized, 1,890,294 shares issued and outstanding 19 19 Common stock - Class B, $0.01 par value, 10,000,000 shares authorized, 3,563,106 shares issued and outstanding 36 36
Additional paid-in capital 84,577 84,577
Accumulated deficit (107,430) (98,802)
Accumulated other comprehensive (loss), net of income taxes (10,750) (10,718)
Net stockholders' deficit (33,548) (24,888) $ $ Total liabilities and stockholders' deficit 235,047 247,298
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EXHIBIT E
Publicly Held Securities
Pursuant to Local Rule 1007-2(a)(7), the following lists the number and classes of shares of stock, debentures, and other securities of the Debtors that are publicly held and the number of holders thereof. The Securities held by the Debtors’ directors and officers are listed separately.
None.
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EXHIBIT F
Debtors’ Property Not in the Debtors’ Possession
Pursuant to Local Rule 1007-2(a)(8), the following lists the Debtors’ property in the possession or custody of any custodian, public officer, mortgagee, pledge, assignee of rents, or secured creditor, or agent for any such entity.
Certain of the Debtors’ landlords and utilities hold security deposits during the term of their leases. Certain third parties may hold prepayments on account of services performed for the Debtors.
Lease Location Lease Exec Building Expiration Security Deposit Name/Use Status Address Date Amount USD Security Deposit Note Foothills Media 59 Field Street - Torrington Original Torrington CT $6,630 TT has deposited with LL, the amount of $676.50 (one month’s rent) as Security Deposit, which amount shall be increased as the Annual Fixed Rent increases. Upon expiration, LL shall return the deposit to TT, provided TT has fully carried out all of 43 Woodland its obligations. (Lease, p. 2, Connecticut Street sec. I); (Lease, p. 31, sec. Magazine Renewed Hartford CT 7/31/2013 $676.50 XIII) 40 Sargent New Haven Drive Register Original New Haven CT 12/31/2016 Silent TT to deposit LL, SD in an amount of $6,650.00. The SD to be returned to TT, at the end of the Lease term or on earlier termination and forfeiture. If the property is sold, LL may transfer or 386 Main deliver the security to any Street bona fide purchaser of the Middletown Middletown real property. (Lease, p. 8, Press Original CT 12/31/2012 $6,650.00 sec.18) 90 Bridge Street Jobs in the US Original Westbrook ME 5/31/2017 $0.00 None. (Lease, p. 2, sec. 3(d))
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Lease Location Lease Exec Building Expiration Security Deposit Name/Use Status Address Date Amount USD Security Deposit Note The parties agree that TT's interest in any previous security deposit for any space presently of formerly leased between the parties or their predecessors is transferred to 1824 Star Batt Drive and 1890 Star Batt Drive to be used as security per the terms of the Security Provision as set out in Lease Form 006.14M dated 01/14/1991, between the LL and the TT then operating under the legal name the "Oakland Press Company, a Michigan Oakland Press - 1824 Star-Batt Corporation". (Modification Circ Drive to the First Lease Extension (Warehouse) Relocated Rochester MI 2/14/2013 $1,530 Agreement, p. 3, sec. 7) Morning Star - 222 N. Main Straight Area Street Star MTM Cheboygan MI 12/31/2008 Silent Morning Star - 318 N. Cedar Leader Bldg MTM Kalkaska MI 7/23/2009 Silent Upon execution of the Lease, TT to provide a Security Deposit in an amount of $16,053.88 as security for the performance of the obligations of TT under the Lease. If LL uses all or any portion of the Security Deposit, TT shall within 10 days after demand thereof deposit cash with LL in an amount sufficient to restore the Security Deposit to the full amount thereof. If the Security Deposit is not applied to the payment of Rent, the same shall be returned within 30 days of the last to occur of expiration of the Lease and the date TT shall have vacated the Premises. LL shall not be obligated to keep the Security Deposit as a separate fund, but may mingle the same with LL's funds, and no 21st Century - 190-194 E. interest shall accrue thereon. Madison Maple Road (Lease, p. 1); (Lease, p. 15, Heights Original Troy MI 9/14/2012 $16,053.88 sec. 25) 01:12458908.1 DB1/ 70981563.1 2
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Lease Location Lease Exec Building Expiration Security Deposit Name/Use Status Address Date Amount USD Security Deposit Note TT to pay LL, $4,500.00 as SD, the SD to be returned at the end of the Lease Term without interest unless TT has defaulted under the security and option agreements signed on the same date as the date. If TT defaults under the lease or the security and option agreements, the SD may be used to pay any costs or 200 Macomb damages, direct or INI Macomb Daily Drive contingent, of the LL under Daily - Mt Mt Clemens the agreements. (Lease, sec. Clemens Original MI 1/31/2013 $4,500.00 4) 100 Macomb INI Macomb Daily Drive Daily - Mt Mt Clemens Clemens Original MI 3/31/2014 $0.00 Silent Morning Star - 711 W. Pickard Mt Pleasant Original Mt Pleasant MI 9/30/2015 $0.00 Silent TT to deposit with LL, $4,083.33 as SD for the performance of TT's obligations under the Lease. The security deposit shall be maintained in an interest bearing account on behalf of TT and shall be returned to the TT, with interest within 10 business days following termination of the Lease, INI - Macomb 51620 Milano except to the extent properly Daily Macomb Twp applied to cure defaults. (Warehouse) Renewed MI 6/30/2013 $4,083.33 (Lease, p. 4-5, sec. 16) Upon execution of the Lease, TT to provide LL a SD in an amount of $4,871.25 for the faithful performance of all 51180 Bedford covenants of the Lease. Upon INI Macomb Street expiration the said SD shall Daily - The New Baltimore be returned to TT. (Lease, p. Voice Renewed MI 6/30/2013 $4,871.25 10, 11, sec. 40, 44)
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Lease Location Lease Exec Building Expiration Security Deposit Name/Use Status Address Date Amount USD Security Deposit Note Upon execution, TT to deposit LL the sum of $5,200.00 as Security Deposit for the performance of TT's obligation under the Lease, including the surrender of possession of LP to LL. If LL applies any part of the deposit to cure any default of TT, TT on demand deposit with LL the amount so applied so that LL shall have the full deposit on hand at all times during the term of INI Macomb the Lease. (Lease, p. 5, sec. Daily - 16177 17) Note: Assumed Roseville Common Road Expiration Date as Security (Warehouse) Renewed Roseville MI 8/31/2013 $5,200.00 Deposit Return Date. Upon execution of the First Addendum, TT to pay LL, $34,000.00 as SD and effective 11/1/2004, such deposit shall be reduced to $27,957.00. At the expiration, LL to refund such deposit, without interest to TT. (2nd Addendum, sec. 8); Heritage One Heritage (1st Addendum, p. 7, sec. Newspapers - Place 14); (Lease, p. 1, sec. 1(k)); Southgate Renewed Southgate MI 10/31/2012 $27,957.00 (Lease, p. 4, sec. 6) Oakland Press - 8174 Goldie Circ Walled Lake (Warehouse) Renewed MI 3/31/2014 $0.00 Silent TT to pay LL, a security deposit of $2,975.00 and to Oakland Press - be returned upon the Circ 275 S. Glaspie completion of the Lease. (Warehouse) Renewed Oxford MI 9/30/2014 $2,975.00 (Lease, sec. IV(A)) TT to pay LL, a security 10525 deposit of $3,500.00 and to Oakland Press - Enterprise be returned upon the Circ Drive completion of the Lease. (Warehouse) Renewed Davisburg MI 3/13/2015 $3,500.00 (Lease, sec. IV(A)) TT to pay LL, SD in an amount of $13,881.82, which INI Macomb 48075 Van shall be returned upon the Daily - Shelby Dyke expiration. (Lease, p. 1, sec. Township Renewed Utica MI 12/31/2013 $13,881.82 2(C))
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Lease Location Lease Exec Building Expiration Security Deposit Name/Use Status Address Date Amount USD Security Deposit Note 1115 E. Whitcomb Lease (Sec 29, Pg 10) - LL Shared Avenue shall return security deposit Financial Madison within 60 days of the end of Services, LLC MTM Heights MI 2/29/2012 $4,459 the Lease. 420/422 West Houghton Avenue Morning Star - West Branch West Branch MTM MI 6/30/2010 $0.00 Silent Upon execution, TT to deposit with LL, $1,250.00 as SD for the performance of TT's obligations under the Lease, which to be returned at the end of the Lease Term without interest. If TT defaults, then LL may apply any portion of the Deposit for the payment of any rent or other charge, which amount to be restored to LL within 431 Ripley 10 days after demand. Morning Star - Blvd. (Lease, p. 1, sec. 1(i)); Alpena MTM Alpena MI 12/31/2010 $1,250.00 (Lease, p. 12, sec. 30) 26395 Northline Heritage Commerce Newspapers MTM Taylor MI 5/31/2012 $0.00 (Lease, p. 4, sec. 29) Upon execution, TT to pay LL, the sum of one month's base rent as security for the 410 S. Union faithful performance by TT Morning Star - Street of all of its obligations under Grand Travers Traverse City the Lease. (Lease, p. 2, sec. Insider MTM MI 5/31/2009 $5,600.00 4(c)) TT to deposit LL, the Security Deposit in an amount of $178,120.83 in the form of cash or the letter of credit. TT shall be entitled to a reduction in the amount of $50,891.67 on each of the 2nd and 5th year anniversary of the Commencement Date. In no event, the Security Deposit shall be reduced no less than $76,337.50. Such Security Deposit to be 5 Hanover returned to TT within 60 after Square the expiration. (Lease, p. 29- Hanover Original New York, NY 11/30/2019 $178,120.83 30, sec. 18)
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Lease Location Lease Exec Building Expiration Security Deposit Name/Use Status Address Date Amount USD Security Deposit Note 20 Lake Avenue Saratoga Saratogian Original Springs NY 6/30/2015 Silent 150 Moreview Blvd Phoenixville - Morgantown Morgantown Renewed PA 9/30/2017 Silent 311 East Lancaster Acme Avenue Newspapers Original Ardmore PA $0.00 Delaware 500 Mildred County Daily Avenue Times Original Primos PA 12/31/2016 Silent TT to pay $1,000.00 as SD. Berks - Mont 12 S. 4th Street (Lease, Basic Lease Newspapers MTM Hamburg PA 6/30/2011 $1,000.00 Provisions, sec. 9) Upon execution, TT to deposit LL, $2,625.00 as SD. LL to give prior notice to TT, to use the SD or any part of it during the term, on demand, TT to pay LL, the amount used. Within 30 days after the expiration, LL to repay any balance (without interest) of SD to TT. (Lease, p. 2, 32-34 S Main sec. Security); (Lease, p. 3, Street sec. 4(a)); (Lease, p. 3, sec. Intercounty Original Medford NJ 12/31/2012 $2,625.00 5) JRC - Corporate 790 Township None. (Lease, Preamble, p. 3, Office Original Yardley PA 7/31/2018 $0.00 sec. 14) 307 Henry St. JRC Renewed Alton IL 8/31/2013 $0.00 Silent
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EXHIBIT G
Debtors’ Premises
Pursuant to Local Rule 1007-2(a)(9), the following lists the premises owned, leased, or held under other arrangement from which the Debtors operate their businesses.
Owned Real Property:
Owner Property Name Address 1. The Goodson Holding Company InterPrint 2100 Frost Road Bristol, PA 19007 2. Journal Register East, Inc. Journal Register Offset 390 Eagleview Boulevard Exton, PA 19341 3. Journal Register East, Inc. Montgomery Newspapers 290 Commerce Drive Fort Washington, PA 19034 4. The Goodson Holding Company The Reporter 307 Derstine Avenue (formerly owned by LRPA, LLC) Lansdale, PA 19446 5. Journal Register East, Inc. (formerly The Times Herald 410 Markley Street owned by Times Herald Publishing Norristown, PA Company, LLC) 19404 6. The Goodson Holding Company The Mercury 24 North Hanover Street Pottstown, PA 19464 7. Journal Register East, Inc. Town Talk 1914 Parker Avenue Holmes, PA 19043 8. Journal Register East, Inc. County Press 3732 West Chester Pike Newtown Square, PA 19073 9. Northeast Publishing Company, Inc. The Trentonian 600 Perry Street (formerly owned by Capitol City Trenton, NJ 08618 Publishing Company, LLC) 10. Journal Register East, Inc. Daily Local News 250 North Bradford Avenue West Chester, PA 19382 11. The Goodson Holding Company Nittany Valley Offset 1015 Benner Pike State College, PA 16801
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Owner Property Name Address 12. The Goodson Holding Company The Review 6220 Ridge Avenue Philadelphia, PA 19128 13. Journal Register East, Inc. The Bristol Press 99 Main Street Bristol, CT 06010 14. Journal Register East, Inc. The Herald One Herald Square New Britain, CT 06051 15. Journal Register East, Inc. The Register Citizen 190 Water Street Torrington, CT 06790 16. Journal Register East, Inc. Foothills Trader 187 Church Street Torrington, CT 06790 17. Journal Register East, Inc. Imprint Printing 97 Defco Park Road North Haven, CT 06473 18. Independent Newspapers, Inc. INI / Macomb Production 35110 Garfield Road Facility Clinton Township, MI 48035 19. Independent Newspapers, Inc. INI Gas Station 16715-16851 15 Mile Road Clinton Township, MI 48035 20. Independent Newspapers, Inc. INI Mt. Clemens Lot lot # 50-55-593-041- 20 (97 Macomb Place) Mt Clemens, MI 48043 21. Great Lakes Media, Inc. The Oakland Press 48 West Huron Pontiac, MI 48342 22. Great Lakes Media, Inc. The Oakland Press 58 West Huron Circulation Annex Pontiac, MI 48342 23. Great Lakes Media, Inc. The Oakland Press Lot 141 Wayne Street Pontiac, MI 48342 24. Heritage Network Incorporated Heritage 20750 Old US 12 Newspapers/Chelsea Chelsea, MI 48118 25. Heritage Network Incorporated Heritage 106 West Michigan Newspapers/Saline Avenue Reporter Saline, MI 48176
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Owner Property Name Address 26. Morning Star Publishing Company Morning Star - The 206 North Bridge Citizen Street Bellaire, MI 49615 27. Morning Star Publishing Company Morning Star - Citizens 112 East State Street Journal Mancelona, MI 49659 28. Morning Star Publishing Company Morning Star - Alma 311 East Superior Buyers Guide Street Alma, MI 48801 29. Morning Star Publishing Company Morning Star - Gaylord 1001 Dickerson warehouse Road Gaylord, MI 49734 30. Morning Star Publishing Company Morning Star - Gladwin 317 West Cedar Buyers Guide Avenue Gladwin, MI 48624 31. Morning Star Publishing Company Morning Star – St. Johns 109 West Higham Buyers Guide Street St. Johns, MI 48879 32. Morning Star Publishing Company Morning Star - warehouse 301 West Steel Street St. Johns, MI 48879 33. Morning Star Publishing Company Morning Star - Huron 129 E. North Street Postal Tawas, MI 48764 34. Northeast Publishing Company, Inc. Morning Journal 1657 Broadway Lorain, OH 44052 35. Northeast Publishing Company, Inc. The News Herald 7085 Mentor Avenue Willoughby, OH 44094 36. Journal Register East, Inc. The Daily Dispatch 130 Broad Street Oneida, NY 13421 37. Journal Register East, Inc. The Record 501 Broadway Troy, NY 12180 38. Journal Register East, Inc. The Daily Freeman 79 Hurley Avenue Kingston, NY 12401 39. Journal Register East, Inc. Taconic Press 53 Front Street Millbrook, NY 12545 40. Journal Register East, Inc. Taconic Press 5 Merrit Avenue Millbrook, NY 12545
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Owner Property Name Address 41. Northeast Publishing Company, Inc. Trentonian Garage 39 Escher Street (formerly owned by Capitol City Trenton, NJ 08618 Publishing Company, LLC)
Leased Real Property:
Lessor Lessee Date of Lease Address 1. Main Street Market, Middletown November 16, 386 Main Street 4th Fl LLC Acquisition 2007 Middletown, CT 06457 Corp. (Separate Leases for Space and Parking) 2. 40 Sargent Drive LLC Journal December 22, 40 Sargent Drive Register East, 2011 New Haven CT 06511 Inc. 3. Gothic Holding CTM March 23, 1990, as 43 Woodland Street Company LLC Acquisitions, amended July 20, Hartford, CT 06105 LLC 1995, as further amended November 11, 2000, as further amended December 5, 2005, and as further amended August 3, 2010 4. Quadrelle Realty Foothills November 1, 2010 59 Field Street Service Media Torrington, CT 06790 5. The Honke Building Journal August 8, 2009, as 307 Henry Street #406 Register Amended August Alton, IL 62002 Company 13, 2012 6. 750, LLC Journal August 14, 2012 750 N Orleans Register Suite 305 Company Chicago, IL 60654 7. Dana Warp Mill LLC JiUS, Inc. February 2, 2006, 90 Bridge Street as amended Westbrook, ME 04092 January 12, 2011 8. K.P.S. Corporation 21st Century November 1, 2006 1115 E. Whitcomb Ave Newspapers Madison Heights, MI Inc. 48071 9. Ouky Property LLC Independent August 16, 1993, 100 Macomb Daily Newspapers, as amended April Drive Inc. 23, 2003 Mt. Clemens, MI 48034 01:12458908.1 DB1/ 70981563.1 4
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Lessor Lessee Date of Lease Address 10. Anfrec LLC 21st Century Effective 200 Macomb Daily Newspapers, September 1, 2009 Drive Inc. Mt. Clemens, MI 48034 11. Gary T Hellebuyck 21st Century October 27, 2005, 48075 Van Dyke Newspapers, as amended Utica, MI 48316 Inc. September 25, 2009 12. Leone Construction Independent June 16, 2000, as 51620 Milano, Suite B Newspapers, amended Macomb Twp., MI Inc. September 18, 48042 2009 13. West Common Assoc Independent June 22, 2005, as 16177 Common Road LLC Newspapers, extended October Roseville, MI 48063 Inc. 5, 2009 14. Blue Water Land Independent July 1, 2000, as 51180 Bedford Street Development Newspapers, extended June 3, New Baltimore, MI Inc. 2005, as extended 48047 November 12, 2009 15. Star Batt Development Oakland Press January 14, 2001, 1824 Star-Batt Drive as amended Rochester, MI 48309 16. Commerce Property Oakland Press February 23, 2006, 8174 Goldie LLC as extended Walled Lake, MI, 48390 September 25, 2009 17. James Guinn 21st Century April 1, 2008, as 10525 Enterprise Dr, Newspapers, extended Ste D Inc. December 10, Davisburg, MI 48350 2009 18. Joseph Guinn Jr Oakland Press October 1, 2007, a 275 S. Glaspie, Suite D extended January Oxford, MI 48370 10, 2010 19. Rodger Dewey Up North Month to month 318 N. Cedar Publications, Kalkaska, MI 49646 Inc. 20. W. Branch Area Morning Star January 1, 2008 420 W Houghton Chamber Of Publishing Month-to-Month West Branch, MI 48661 Commerce Company 21. Wegbuild Venture Morning Star Month to month 431 Ripley Blvd Publishing Alpena, MI 49707 Company
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Lessor Lessee Date of Lease Address 22. CMR Investments LP Morning Star August 1, 2000, as 711 W Pickard Publishing amended March Mt. Pleasant, MI 48858 Company 31, 2003, as further amended August 14, 2009 23. United-Way Morning Star Month to month 222 North Main Street Cheboygan Publishing Cheboygan, MI 49721 Company 24. Union Street Morning Star Month to month 410 S Union Street Investments Publishing Traverse City, MI Company 49684 25. Ari-El Enterprises Inc Heritage March 22, 2002, as One Heritage, Suite 100 Newspapers amended & 150 September 22, Southgate, MI 48195 2003, as further amended December 9, 2004, as further amended August 24, 2005, and as further amended June 5, 2009 26. Rea Investments No 1 Heritage June 1, 2004, as 26395 Northline LLC Network extended May 12, Commerce, Suite 600- Incorporated 2009, as further 601 extended October Taylor, MI 48180 5, 2009, 27. 190 East Maple LLC Greater Detroit May 31, 2007 190-194 E. Maple Road Newspaper Troy, MI 48071 Network, Inc. 28. 5 Hanover Square Journal February 29, 2012 5 Hanover Square Property Investors II, Register 25th Floor LLC Company New York, NY 10004 29. Saratoga Prime Journal June 13, 2012 20 Lake Avenue Properties LLC Register East, Saratoga Springs NY Inc. 12866 30. Banin Investment Central Record November 1, 2011 32-34 S Main St Group Limited Publications Medford, NJ 08033 Liability Company 31. Jim Webb Berks-Mont July 1, 2010 12 S. 4th Street Newspapers, a Hamburg, PA 19526 division of Journal Register East, Inc.
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Lessor Lessee Date of Lease Address 32. Stony Hill Office Journal December 7, 2005, 790 Township Line Development II, LP Register as amended Road Company August 1, 2006 Yardley, PA 19067 33. B&E Property Tri County October 1, 2012 150 Moreview Blvd Management, Ltd. Record Route 23 Morgantown, PA 19453 34. 500 Mildred Ave LLC Journal December 22, 500 Mildred Avenue Register East, 2011 Primos PA 19018 Inc. 35. 311 East Lancaster, Journal December 22, 311 East Lancaster Ave LLC Register East, 2011 Ardmore, PA 19003 Inc.
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EXHIBIT H
Pursuant to Local Rule 1007-2(a)(10), the following lists the location of the Debtors’ substantial assets, books and records, and nature, location, and value of any assets held by the Debtors outside the United States.
Location of Debtors’ Substantial Assets
The Debtors operate in multiple states, but the substantial assets are located in New York and Pennsylvania at the addresses below:
5 Hanover Square 25th Floor New York, NY 10005
790 Township Line Road, Third Floor Yardley, PA 19067
Location of the Debtors’ Books and Records:
790 Township Line Road, Third Floor Yardley, PA 19067
Debtors’ Assets Outside of the United States
The Debtors hold no assets outside of the United States.
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EXHIBIT I
Summary of Actions or Proceedings Pending Against the Debtors1
Date Property Name of Matter Notified Type of Case Description/Status 1. Daily Local or DeCesare, Jason 6/28/2012 Copyright Delaware County Times Journal Infringement received via facsimile a cover Register East, letter from attorney, J. Conor Inc. Corcoran with a copy of a complaint filed against defendant for copyright infringement. DELCO used a photo taken by Plaintiff in an article published 2/22/10 prior to Plaintiff's copyright registration. Plaintiff demands $30,000 to settle. Settlement agreement signed 8/15/12 for $10,000. Payment due to Plaintiff September 15, 2012.
1 The Debtors have included all information reasonably available to them to date. To the extent additional information becomes available, the Debtors will provide such information in the Debtors’ Statement of Financial Affairs and/or Schedules of Liabilities, as applicable.
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Date Property Name of Matter Notified Type of Case Description/Status 2. Daily Local or Childs, Joan 11/10/2011 Employment Plaintiff filed Complaint on 11- Journal Practice 10-11 and filed her First Register East, Liability Amended Complaint on on 6- Inc. 19-12. The Amended Complaint alleges two counts of age discrimination and two counts of retaliation under the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq., and the Pennsylvania Human Relations Act, 43 P.S. § 955(a), et seq. Plaintiff alleges that she was terminated on 4-11-11 as part of a reduction in force on the basis of her age, and then not hired for two open positions with Journal Register East, Inc. due to her age, while younger candidates were hired. Plaintiff also alleges that the decision not to hire Plaintiff following her termination was in retaliation for her filing a Charge of Discrimination with the EEOC on June 7, 2011. Document discovery is completed, and depositions of Plaintiff and two company employees have been completed. Two additional company employees are scheduled to be deposed and a settlement conference is scheduled on October 31, 2012, at which point the parties will proceed to motion practice. Journal Register East, Inc. denies the substantive allegations of discrimination and retaliation in their entirety.
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Date Property Name of Matter Notified Type of Case Description/Status 3. Delaware Schneller, James 3/28/2011 Publisher's This defamation suit was County Times Liability originally filed pre-petition and or The discharged in a prior Goodson bankruptcy. Claimant re-filed Holding and court currently has stricken Company this action due to failure to pay filing fee. Court denied motion for reconsideration by Schneller and dismissed with prejudice. Expect Schneller to appeal. Fennigham, Stevens & Dempster LLP filed motion 3- 15-12 to dismiss Plaintiff's Amended Complaint. Schneller filed 2nd Amended Complaint. Judge granted Defendant’s Preliminary Objections dismissing 2nd Amended Complaint. On 7-27-12 Schneller filed a Rule 9011 Motion for Sanction and a Motion for Reconsideration with bankruptcy court. Willkie Farr to respond. On 7-31-12 Schneller filed Motion for Reconsideration in Delaware Court of Common Pleas. Delaware Court issued order 8/16/12 denying Schneller’s motion for reconsideration. Awaiting judge’s decision in New York court. Schneller recently filed an Affidavit in Support of his motion for reconsideration in New York.
4. Kingston Davis, Donna 4/5/11 General Auto accident that took place Daily Liability 11/16/10 with Kingston driver, Freeman or Edmund Getz. Attorney Journal submitted responses to plaintiffs Register East, Demand for Bill of Particulars Inc. and combined discovery demands. Plantiff has pre- existing conditions that she claims were exacerbated by the accident. Settlement expected. Court scheduled mandatory settlement conference for 4/26/12. Authorization granted to settle for $31,500. Authorized to settle - Plaintiff currently seeking $75,000.
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Date Property Name of Matter Notified Type of Case Description/Status 5. Kingston Mercer, Arthur 8/3/11 Publisher’s Arthur Mercer, currently Daily Liability incarcerated for drug charges, Freeman or filed defamation complaint Journal against paper and publisher. Register East, Paper published article Inc. regarding his arrest on drug charges but he claims drugs were planted on him therefore article is defamatory. NY attorney working with Fennigham, Stevens & Dempster LLP answered complaint and will file motion to dismiss based upon statute of limitations. Plaintiff opposed and the defendant learned there was a second police blotter published within statute of limitations. Attorney for defense to withdraw motion, answer the complaint and conduct discovery.
6. Lansdale The Kaisla, Marja v. 9/14/2010 Publisher’s Plaintiff filed Claim against The Reporter or Lansdale et al Liability Reporter of defamation related The Goodson to her termination as a Director Holding for the Lansdale Center for the Company Performing Arts. $250,000 demand. Partial settlement for JRC not likely. Lawsuit Analysis prepared by attorney available. Moving towards trial.
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Date Property Name of Matter Notified Type of Case Description/Status 7. Main Line Riley, Thomas 6/21/2012 Publisher's Plaintiff field complaint against Media or Liability Philadelphia Media Inc. and Journal Journal Register Company Register East, (“JRC”) for defamation related Inc. to an article written by the Inquirer and re-published by Main Line Media News (“MLM”) claiming defamation. The article written by the Inquirer refers to a wrongful termination suit by former employees of the Pennsylvania Convention Center of which Plaintiff formerly held the position of Chairman. Mr. Riley is not a named defendant in the wrongful termination suit but claims the article written by Inquirer and re-published by MLM raises allegation that he directed legal fees to his law firm. JRC filed Preliminary Objections and Plaintiff responded to JRC's PO's as of August 7, 2012.
8. New Haven Rivera, Herberto v, NHR 3/11/2011 General Lawsuit submitted to Superior Register or Liability Court State of New Haven Journal regarding injuries from a fall on Register East, New Haven Register property. Inc. GL claim- Travelers assigns attorney to process. Plaintiff made $36,000 demand which was rejected by Travelers based on fact company had no prior knowledge of hole and plaintiff has no proof of any prior knowledge by company. Most likely go to trial March 2013. 9. New Haven Cepeda, Joel v. NHR & 2/4/2011 General Motor vehicle accident. GL Register or Charles Davis (driver) Liability claim – Travelers assigns Journal attorney to process. Register East, Inc.
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Date Property Name of Matter Notified Type of Case Description/Status 10. New Haven Antar, Theodora v. NHR 11/2/2011 General Two claims, one from Driver Register or Gagliardi, Ralph v. NHR 12/21/2011 Liability and one from passenger Journal involved in motor vehicle Register East, accident with NHR driver Inc. Richard Fowler in March 2009. Defendants have completed interrogatories. Report on Answers to Interrogatories, responses to request for production and medical reports received. Depositions in the Antar matter have beem scheduled for October 18, 2012.
11. New Haven Gibson, David 3/19/2012 Publisher’s Received a letter from an Register or Liability attorney representing David Journal Gibson claiming slander. NHR Register East, published a picture of Mr. Inc. Gibson but identified him as an attorney on trial for assault with a motor vehicle. Turned over to insurance. Assigned John Walsh as counsel. Walsh spoke to Gibson's attorney in May 2012.
12. New Haven Orjuela, William 6/11/2007 Worker’s On 5/27/07 Plaintiff filed claim Register or Comp against NHR after falling on Journal snow in parking lot while Register East, performing work on our Inc. property for M&O Company. In 2009, Claim was permanently barred by bankruptcy court against company. Plaintiff allowed to proceed with litigation to recover insurance proceeds. Plaintiff must reimburse company for any costs or expenses including the self-insured retention under the applicable insurance policy. Court has scheduled a Trial Management Conference for May 6, 2013.
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Date Property Name of Matter Notified Type of Case Description/Status 13. Norristown Macrina, Paula 10/6/2011 Publisher’s Received certified letter from (Times Liability counsel for Macrina alleging Herald) or defamation and invasion of Journal privacy from articles published Register East, 5/28/11 and 6/1/11. 5/28/11 Inc. article stated Ms. Macrina was charged with false reports to police and drug violations from a 11/27/10 incident after lab confirmed white powdery substance was heroin. 6/1/11 article contained a correction stating that Paula Macrina was incorrectly identified in the 5/28/11 article and identified her as the arrested person's sister which is true. Demand was made for $63,300 plus attorneys fees. Defendant counter offered and entered into that certain Tolling Agreement dated as of May 9, 2012 by and between Paula Macrina and Journal Register East, Inc. t/a Times Herald.
14. Oakland Press Zbiciak, Nick 1/13/2012 EEOC EEOC complaint of age or Great discrimination. Claimant Lakes Media, applied for internal job posting. Inc. A younger candidate was selected and claimant was subsequently included in an RIF in Aug. 2011. EEOC conducted an investigation and charges dismissed July 2012.
15. Oakland Press LaBarge, Mark 2/14/2012 General Independent contractor, Mark or Great Liability LaBarge, tripped and fell on a Lakes Media, loading dock plate while loading Inc. newspapers. He is seeking in excess of $25,000 and continues to work for the Oakland Press as an Independent Contractor. Interrogatories were sent to Plaintiff 3/21/12.
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Date Property Name of Matter Notified Type of Case Description/Status 16. Oakland Press Semma, Jonathan 4/20/2011 Publisher’s On April 20, 2011, Oakland or Great Liability Press received a demand letter Lakes Media, for a retraction of an article Inc. published 4/14/11. The article referred to a marijuana police raid with the involvement of a person named Johni Semma. Defendant published a photo with the article of a Johnny Semma allegedly taken from his Facebook page. Defendant printed a retraction/apology. No further contact until June 29, 2012 when Plaintiff filed suit seeking damages arising out of the erroneous publication of his photo. Defendant filed a Motion for Summary Disposition based on statute-of-limitations and Plaintiff's failure to meet pleading standard of false-light invasion of privacy claims. Court dismissed with prejudice on August 27, 2012.
17. Saratoga (The Gibeault, Linda Employment Filed age discrimination Saratogian) or Practice complaint on April 5, 2010 with Journal Liability NY Division of Human Rights Register East, (“DHR”) (administrative Inc. complaint with no amount of demand). Defendant responded to complaint. DHR provided defendant with claimant’s subsequent response. DHR dismissed based on bankruptcy order. Plaintiff permitted to appeal once bankruptcy case is closed. Bankruptcy case closed February 14, 2011. No appeal filed to date.
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Date Property Name of Matter Notified Type of Case Description/Status 18. Digital First Lackner, Zelda 6/26/2012 Class Action Plaintiff filed class action Media, Inc. complaint in California against DFM for violations of the Credit Card Accountability & Disclosure Act & Electronic Funds Transfer Act, Unfair Competition Laws, False Advertising Law, Consumer Legal Remedies Act and Unjust Enrichment as a result of a promotion, "Daily Deals", whereby coupons or gift cards with expiration dates were given to consumers.
19. Open Insurance Matters
Policy Accident Type Year Claimant State Date Description AL 10/1/2008 DAVIS,CHARLES CT 03/22/2009 IV WAS DRIVING ON RTE 80 AT * EASTERN ST, HIT BY OV ON RIGHT REAR & SIDE. OV ROLLED OVER. GL 10/1/2005 ORJUELA,WILLIAM CT 01/19/2006 CLAIMANT MOVING SHEET * METAL FROM PARKING LOT AND SLIPPED ON ICE AND SNOW, FELL AND BROKE HIS WRIST GL 10/1/2007 SCHWARTZ,DEBRA PA 05/18/2008 CLAIMANT ALLEGES SHE * STEPPED INTO A HOLE ON MARPLE CAMPUS OF DELAWARE COUNTY COMMUNITY COLLEGE GL 10/1/2008 RIVERA,HERIBERTO CT 08/17/2009 A PERSON WAS WALKING * ACROSS LAWN AND STEPPED INTO A HOLE AND WAS INJURED. WC 3/1/2001 DIESI, PHILIP CT 02/28/2002 299B CUMULATIVE * TRAUMA/REPETITIVE USE WC 3/1/2001 KENNEDY, JERILYN NY 08/22/2001 EMPLOYEE BENT OVER TO * GATHER INSERTS/HURT LOWER BACK/PAIN IN LOWER BACK AND NECK IW 518-274-2176 MATTER ID 35824 WC 10/1/2003 HOLLOWAY,WILLIAM PA 01/23/2004 IW SLIPPED ON ICE AND FELL * EXITING A VAN INJURING THEIR LT KNEE. WC 10/1/2004 BUSHEY,MARY NY 09/15/2005 NEGATIVE C-2: EMPLOYER'S * FIRST NOTICE OF THIS ALLEGED LOW BACK STRAIN INJURY WAS ON 10/31/05 WHEN RECEIVED CALL FROM PROVIDER. WC 10/1/2005 BAKER,JAMES CT 04/11/2006 IW LIFTING OBJECTS, STRAINED * RT SHOULDER 01:12458908.1 DB1/ 70981563.1 9
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Policy Accident Type Year Claimant State Date Description WC 10/1/2006 HUGHES,EDWARD PA 03/18/2007 THE NEWSPAPER CART FELL ON * THE IW WHILE HE WAS REMOVING IT FROM THE DELIVERY TRUCK. UNKNOWN BODY PARTS INJURED AT THIS TIME. WC 10/1/2006 OWEN,CAROL,C PA 10/11/2006 EMPLOYEE COMPLAINS OF JOINT * AND MUSCULAR PAIN IN RIGHT THUMB AND HAND RADIATING UP THROUGH FOREARM. WC 10/1/2006 SMITH,WALTER PA 09/25/2007 EMPLOYEE FELL AND HIT THEIR * HEAD ON THE SIDEWALK WC 10/1/2007 BAKER,JAMES CT 12/21/2007 A BUNDLE GOT STUCK IN A * MACHINE & THE I/W WAS TRYING TO UNSTICK IT WHEN HE STRAINED HIS LOW BACK & TAIL BONE WC 10/1/2007 CUSHMAN,HENRY CT 02/27/2008 EE BENT DOWN TO PICK UP A * BUNDLE OF NEWSPAPERS IN THE TRUCK AND FELT PAIN IN LOW BACK. WC 10/1/2007 MALICKI,FRANK CT 10/10/2007 IE WAS CARRYING A PIECE OF * EQUIPMENT AND STRAINED HIS LEFT SHOULDER. WC 10/1/2007 MOSES,JEFFREY,R PA 06/03/2008 WHILE STACKING SKIDS, * EMPLOYEE FELT PAIN IN RIGHT HAND FROM MIDDLE KNUCKLE TO WRIST. WC 10/1/2007 MYERS,GLENN CT 12/21/2007 IV WAS TRAVELING NORTH STOP * AT THE RED LIGHT WHEN THE IV WAS REAR ENDED WC 10/1/2007 NICKELS,MARK NY 12/05/2007 EE SLIPPED ON STAIRS AND FELL * DOWN. EE INJURED BOTH SHOULDERS AND LOW BACK. WC 10/1/2007 SIMMONS,HARLAND MI 03/17/2008 IW WAS STACKING PAPERS AT * TRUCK ; OTHER EMPLOYEE PULLING IN STRUCK IW CAUSING FRACTURE TO RT ANKLE WC 10/1/2008 HAMMOND,EDWARD NJ 10/16/2008 HIT BY CAR WHILE DELIVERING * NEWSPAPERS, CAUSING INJURY TO LEFT SHOULDER, UPPER BACK AND LEFT KNEE. WC 10/1/2008 SPAK,TERESA CT 04/15/2009 EE LOST BALANCE AND FELL IN * HALLWAY. EE BANGED BACK OF HEAD ON WINDOW FRAME. WC 10/1/2008 TORRES,MIGUEL CT 08/10/2009 IW WAS PULLING A PLATE OFF OF * PRESS UNIT AND FELT PAIN IN RT SHOULDER AL 10/1/2009 FOWLER,RICHARD CT 12/24/2009 OV GOING THRU GREEN LIGHT * AND IV WENT TO TURN IN GAS STATION IN FRONT OF IV
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Policy Accident Type Year Claimant State Date Description WC 10/1/2009 HOLODY,TOM MI 10/18/2009 IW TAKING BUNDLES OFF THE * CONVEYOR AND FELT PAIN IN LEFT SIDE HIP, DIAGNOSED WITH STRAIN OF LEFT HIP WC 10/1/2009 MARTIN,WILLIAM CT 03/26/2010 IE TRIPPED OVER THE CURB AND * FRACTURED HIS RIGHT SHOULDER. ALSO DISLOCATED HIS SHOULDER. WC 10/1/2009 STROUD,JAMES PA 09/07/2010 IW WAS CARRING A BOX AND * STRAINED HIS LEFT SHOULDER WC 10/1/2009 TURNER,DARRELL CT 12/31/2009 EE WAS LIFTING BUNDLES OUT * OF THE TRUCK AND STRAINED THE LOWER BACK. AL 10/1/2010 GETZ,EDMOND NY 11/16/2010 OV RAN A RED LIGHT AND * COLLIDED WITH IV GL 10/1/2010 LABARGE,MARK MI 01/22/2011 CLMT ALLEGES HE STEPPED ON * AN UNSECURED LOADING DOCK PLATE THAT CAUSED HIM TO FALL TO THE GROUND AND SUFFER SEVERE,PERMANENT INJURIES. WC 10/1/2010 BRUMSEY,JAHAD CT 09/21/2011 IW WAS LIFTING POST OFFICE * BAGS AND FELT A POP IN GROIN AREA WC 10/1/2010 CAMPBELL,GUY MI 05/01/2011 IW WAS PULLING A BUNDLE OF * PAPERS WHICH WERE CAUGHT ON GATE OF VAN - IW FELT A POP IN L SHOULDER WC 10/1/2010 CROOK,GARY,A CT 03/10/2011 IW PUT PLATES ON PRESS * REPETITIVE JOB TURNING, OVERTIME FELT PAIN IN SHOULDER AND GETTING WORSE. WENT TO DR FOR ROUTINE PHYSCIAL HE STATED ROTATOR CUFF, OR TENDONITITIS IN RT SHOULDER WC 10/1/2010 CUSHMAN,HENRY CT 09/15/2011 CLMNT LIFTING BUNDLES OF * NEWSPAPER WC 10/1/2010 ECKMAN,HATTIE,K PA 05/25/2011 AFTER LEAVING MEETING WITH * ADVERTISER, TRAVELLING EAST ON 73 WHEN I STRUCK A VEHICLE WHICH HAD RUN A STOP SIGN. BOLTH VEHICLES WERE DETERMINED TO BE 'TOTALLED'. I SUSTAINED NUMEROUS INJURIES FOR WHICH I WAS TREATED AT PMMC WC 10/1/2010 HILLS,JAMES PA 02/03/2011 EE WAS PUTTING PAPERS IN BOX * AND FELL ON ICE,STRUCK RIGHT KNEE, RIGHT ELBOW AND LEFT HAND ON GROUND
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Policy Accident Type Year Claimant State Date Description WC 10/1/2010 HOLLOWAY,WILLIAM PA 03/10/2011 WHILE MOVING BUNDLES OF * PAPER AROUND IN THE VAN, EMPLOYEE FELT SOMETHING 'POP' AND 'TEAR' IN RIGHT SHOULDER WC 10/1/2010 HVIZDAK,PETER CT 07/29/2011 EE WAS DRIVING HIS PERSONAL * VEHICLE ON COMPANY BUSINESS WHEN HE WAS REARENDED BY ANOTHER VEHICLE, RESULTING IN UNSPECIFIED INJURIES TO HIS BACK AND NECK. WC 10/1/2010 SOLOMON,DAVID CT 08/06/2011 FATALITY; IW WAS INVOLVED IN * A VEH ACCIDENT.
WC 10/1/2010 WHITE,KEVIN MI 09/15/2011 IE WAS PICKING UP A GAP PLATE * TRIPPED ON THE BACK OF TRUCK ON THE INSIDE AND PLATE FELL ONTOP OF THE IE AL 10/1/2011 STETTLER ANDREW PA 06/21/2012 IV WAS CHANGING LANES, AND * WAS STRUCK BY OV. UNK POI AND EXT OF DMG, PLEASE CONFIRM. AL 10/1/2011 UNK UNK PA 05/31/2012 BROKEN DOOR GLASS - UNK * THREW OBJECT BROKE DOOR GLASS - 2000 WORKHORSE 5T4KP31R9Y3322464 AL 10/1/2011 WILLIAMS,JOHN PA 02/29/2012 EE VEHICLE (TRUCK) IN RIGHT * LANE WAS CUT OFF BY CAR FROM LEFT LANE - CAR HIT TRUCK WC 10/1/2011 BAIZE,TIMOTHY,A MI 11/14/2011 IW FELL BACK INTO A ROLL * SLIDE PIT. WC 10/1/2011 BLEVINS,ERIC PA 05/21/2012 IW OPENED THE DOOR TO PUT * PAPERS IN THE BOX, IW SLIPPED ON THE RUNNING BOARD & GRABBED THE HANDLE AND WENT SIDEWAYS FEELING A STRETCH IN THE LOWER RT SIDE. WC 10/1/2011 CAIN,WILLIAM,B PA 01/31/2012 IE TRIPPED GOING UP STEPS. * TWISTED FOOT AND SUSTAINED FRACTURE. WC 10/1/2011 CHELL,LISA NJ 05/21/2012 IW STEPPED FROM ENTRANCE * RUG TO TILE FLOOR, SLIPPED AND FELL LANDING ON KNEES, ALSO INJ RIGHT ARM, BOTH KNEES AND BACK. WC 10/1/2011 CUSHMAN,HENRY CT 01/27/2012 IW DRIVING IV S BOUND IN I-95, * GOT OFF EXIT 9, IV SWERVED TO AVOID A DEER,VEH WENT DOWN EMBANKMENT AND GOT INJURED, CUTS AND BRUISES ARMS, HEAD. VEH ALSO HIT A GUARD RAIL.
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Policy Accident Type Year Claimant State Date Description WC 10/1/2011 DREIBELBIS ALAN PA 06/14/2012 WHEN IW WAS HANGING PLATES, * HIS R THUMB BECAME SWOLLEN. WC 10/1/2011 FLORA MICHAEL NY 06/06/2012 EMPLOYEE INJURED HIS RIGHT * THUMB AND POINTER FINGER IN THE PRESS. WC 10/1/2011 FOLEY,EDWARD PA 03/13/2012 EMPLOYEE WAS HIT BY * ANOTHER VEHICLE FROM BEHIND WHILE RETURNING FROM SALES CALL. WC 10/1/2011 HVIZDAK,PETER CT 03/28/2012 IW WAS DRIVING TO AN * ASSIGNMENT WHEN A VEHICLE REAR ENDED THE VEHICLE IW WAS DRIVING- NECK & BACK WERE INJURED WC 10/1/2011 HVIZDAK,PETER CT 03/28/2012 COURSE OR EMPLOYMENT AS * VIDEOGRAPHER WC 10/1/2011 JACOBS,MIRIAM NJ 04/17/2012 EMPLOYEE SET HER ITEMS AT * HER DESK, LOST BALANCE, FELL AND STRUCK HEAR HEAD ON DESK. WC 10/1/2011 JOHNSON,JEFFREY MI 04/09/2012 IW WALKED UP TO HIS VEHICLE * & BENT OVER RESULTING IN A STRAIN TO THE LOWER BACK WC 10/1/2011 JOHNSTON,PATRICIA PA 01/13/2012 IW FELL DOWN THE OUTSIDE * STEPS. IW HAD SURGERY ON HER ELBOW AND THE IW HIT HER HEAD WC 10/1/2011 PETTIWAY,TOMMY,L NY 04/19/2012 THE IE GOT STUCK IN FREIGHT * ELEVATOR AND HURT HIS SHOULDER WC 10/1/2011 PRICE,DANIEL CT 01/27/2012 IE WAS GETTING A ROLL OF * NEWS PRINT AND WAS FACING THE OPPOSITE END AND DID NOTICED A ROLL WAS COMING DOWN WHICH PIN THE IE BETWEEN TWO NEWS PRINT ROLLS WC 10/1/2011 RASNAKE,JANICE MI 04/01/2012 IW MOVING A BUNDLE IN BACK * OF HER VAN, INJURED LEFT SHOULDER ROTATOR CUFF WC 10/1/2011 SCHETTLER,MAE MI 05/05/2012 IW REACHED FOR BUNDLE OF * INSERTS AND SUSTAINED SPRAIN TO WRIST. PLEASE CONFIRM EXT OF INJURY AND LOCATION OF SPRAIN. WC 10/1/2011 STETTLER ANDREW PA 06/21/2012 IW WAS IN MOTOR VEHICLE * ACCIDENT, SUSTAINED WHIP LASH SYMPTOMS TO UPPER BACK, SHOULDERS, AND NECK. PLEASE CONFIRM EXT OF INJ. WC 10/1/2011 STONE BARBARA J MI 11/04/2011 IW HURT HER BACK WHILE * REACHING
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Policy Accident Type Year Claimant State Date Description WC 10/1/2011 TERRACE,MICHAEL CT 12/07/2011 IE UNLOADING MATERIAL & FELL * BETWEEN END OF TRUCK & THE LOADING DOCK ENTERANCE WC 10/1/2011 VANORDEN,DONALD,W MI 03/23/2012 EE SAID HE HAD LOADED PALLET * JACK, AND LOADED JACK ROLLED OVER HIS TOES. WC 10/1/2011 WRINN,JOHN CT 12/12/2011 IW WAS PULLING A CONVAYER * OUT OF BLDG SLIPPED AND FELL AND INJURED LOWER BACK.
NLRB Matters
On July 25, 2012, an unfair labor practice charge was filed against The Record (Troy, NY) claiming that The Record violated Section 8(a)(1) and (3) of the National Labor Relations Act by refusing to deduct union dues from employees’ paychecks, while allowing deductions to be made for United Way contributions and other purposes. On August 16, 2012, this charge was dismissed by Region 3 of the National Labor Relations Board.
Employment-Related Litigation
1. 2011 Michigan DOL FLSA audit. In April 2011, The Oakland Press, in the Michigan cluster, experienced a routine DOL wage and hour audit. The DOL found no material findings and recommended the company perform an internal audit of two years of payroll records to ensure full compliance. The internal audit was completed in June 2011 and back overtime pay was computed and was $35,000.00 in total expenditure to 85 employees. The payouts were reviewed by the DOL and paid in June 2011.
2. Joan Childs matter. Plaintiff initially filed her Complaint on November 10, 2011 in the Eastern District of Pennsylvania, and filed her First Amended Complaint on June 19, 2012. The Amended Complaint alleges two counts of age discrimination and two counts of retaliation under the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq., and the Pennsylvania Human Relations Act, 43 P.S. § 955(a), et seq. Specifically, Plaintiff alleges that she was terminated on April 11, 2011 as part of a reduction in force on the basis of her age, and then not hired for two open positions with Journal Register East, Inc. due to her age, while younger candidates were hired. Plaintiff also alleges that the decision not to hire Plaintiff following her termination was in retaliation for her filing a Charge of Discrimination with the U.S. Equal Employment Opportunity Commission (“EEOC”) on June 7, 2011. Document discovery is completed, and depositions of Plaintiff and two company employees have been completed. Two additional company employees are scheduled to be deposed, and a settlement conference is set to be scheduled on October 31, 2012, at which point the parties will proceed to motion practice. The Company denies the substantive allegations of discrimination and retaliation in their entirety.
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3. Nick Zbickiak complaint. EEOC complaint of age discrimination. Claimant applied for internal job posting. A younger candidate was selected and claimant was subsequently included in an RIF in Aug. 2011. The EEOC conducted an investigation and charges were dismissed in July 2012.
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EXHIBIT J
Senior Management of the Debtors
Name Tenure Position Experience/Responsibilities John Paton 2010-present Chief Executive John Paton is the CEO of Officer Digital First Media. John Paton is a career newspaper executive who has been responsible for both print and online divisions in the US, Canada, France and Spain. Prior to joining Journal Register Company, John was the co-founder of impreMedia. Jeffrey Bairstow 2010-present President and Chief Prior to joining Journal Financial Officer Register Company, Jeffrey served as Chief Financial Officer of CCBR-Synarc, Inc., and was also the President of its Global Imaging Division. Mr. Bairstow also held a number of senior positions in both operations and finance in public and private settings in the healthcare and technology industries holding the title of President at America Service Group, RelayHealth and Managed Health Network. Mr. Bairstow is a graduate of Vanderbilt University and received a MBA from Vanderbilt’s Owen School of Business. Michael Kuritzkes 2012-present Executive Vice Before joining Digital First President and General Media, Mr. Kuritzkes was Counsel General Counsel of Philadelphia Media Network, the owner of The Philadelphia Inquirer, The Philadelphia Daily News and Philly.com. Prior to Philadelphia Media, Mr. Kuritzkes held several senior positions in the energy industry including serving as Senior Vice President and General Counsel of Sunoco, Inc. from 2000 to 2010. Mr. Kuritzkes also has extensive experience as a transactional
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lawyer both in law firms and in-house. William J. Higginson 2006-2010 (Senior President and Chief Mr. Higginson started his Vice president of Operating Officer career as a pressman for production); Matzner Publications in 1973. 2010 – present He has served the Company in (President and Chief various management and Operating Officer operational positions from Production Director at the Trentonian, in Trenton, New Jersey to operational responsibility for the Company’s Connecticut cluster, including its flagship property, the New Haven Register. In 1994, Mr. Higginson moved to the corporate office as Corporate Production Director where he was instrumental in the formation of Journal Register Company and its initial public offering and listing on the NYSE. Gary Struening 2005-present Vice President - Prior to joining Journal Finance Register Company, Gary was Corporate Controller for Amazing Savings, Inc. Arturo Duran 2010- present Executive Vice Prior to joining Journal President, digital Register Company, Arturo served as Chief Executive Officer of ImpreMedia Digital, LLC, and was President of Interactive and Business Integration for Canwest Mediaworks. Mr. Duran has a long and distinguished career in the online field. He previously served in executive roles at AOL including those of Vice President, Multicultural, for AOL Media Networks, VP Marketing and Interactive Content for AOL Canada, and Director Business Development for AOL Mexico as member of the Team that launched AOL Latin America. Prior to those appointments, Mr. Duran was the Director of Business Development, Internet Division 01:12458908.1 DB1/ 70981563.1 2
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for the Polaroid Corporation. Robert Monteleone 2010-present Chief Human Prior to joining Digital First Resources Officer Media, Robert had more than 20 years experience in human resources at Covanta Energy, the York Group and Sara Lee Bakery World Wide. Adam Burnham 2007-present Vice President, Local Prior to joining Journal Sales Register Company, Adam worked as the Suburban Journals of Greater St. Loiuis. James Brady 2011-present Editor-in-Chief James oversees the editorial strategy and operations. Prior to his current position, James was the general manager of TBD.com, and was part of the washingtonpost.com’s launch team. n between his stints at washingtonpost.com, Brady spent more than four years at America Online, serving as Group Programming Director, News & Sports; Executive Director, Editorial Operations; and Vice President, Production & Operations. During his time at AOL, Brady was in charge of the service’s coverage of the 9/11 terrorist attacks and the 2000 presidential election. Brady began his career as a sportswriter at The Washington Post in 1987. Jonathan Cooper 1998-present Vice President Media Jonathan previously served as Relations & managing editor and online Employee director of the New Haven Communications Register and editory of The Herald (New Britain,CT) and The Register Citizen (Torrington, CT).
t
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EXHIBIT K
Payroll
Pursuant to Local Rule 1007-2(b)(1)-(2)(A), the following provides the estimated amount of payroll to the Debtors’ employees (not including officers, directors, and stockholders) and the estaimted amount to be paid to officers, stockholders, directors, and financial and business consultants for the thirty (30) day period following the filing of the chapter 11 petitions.
Payment to Employees $6,581,910 (Not including Officers, Directors, and Stockholders) Payment to Officers, $452,500 Directors, and Stockholders Payment to Financial and $788,000 Business Consultants
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EXHIBIT L
Debtors’ Estimated Cash Receipts and Disbursements for the Thirty (30) Day Period Following the Filing of the Chapter 11 Petition
Pursuant to Local Rule 1007-2(b)(3), the following provides, for the 30-day period following the filing of the Debtors’ chapter 11 petitions, the estimated cash receipts and disbursements, estimated net cash gain or loss, and estimated obligations and receivables expected to accrue that remain unpaid, other than professional fees.
Cash Receipts $20,674,000 Cash Disbursements $21,691,000 Net Cash Gain/Loss $(1,017,000)
Unpaid Obligations $30,993,000 Unpaid Receivables $27,870,000
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ANNEX A
Corporate Structure Chart
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Journal Register Company DE Corporation
Chanry Communications Ltd. Register Company, Inc. NY Corporation JR East Holdings, LLC DE Corporation Digital First Media Inc. (Inactive) DE LLC DE Corporation
Pennysaver Home Journal Register East, Inc. Distribution Corp. DE Corporation NY Corporation 50% Ownership of Journal Company, Inc. (Inactive)
Orange Coast Publishing Co. Middletown Acquisition Corp. JiUS, Inc. St. Louis Sun Publishing Co. CA Corporation All Home Distribution Inc. DE Corporation DE Corporation DE Corporation (Inactive) NY Corporation Northeast Publishing (Inactive) Company, Inc. DE Corporation
Journal Company, Inc. Trademark Owner Journal Register Supply, Inc. 21st Centrury Newspapers, Inc. Acme Newspapers, Inc. DE Corporation DE Corporation DE Corporation PA Corporation Hometown Newspapers, Inc. RI Corporation (Inactive)
JRC Media, Inc. NJ Trademark Owner DE Corporation The Goodson Holding Company Morning Star Publishing Independent Newspapers, Inc. Heritage Network Incorporated Great Lakes Media, Inc. DE Corporation Company MI Corporation MI Corporation MI Corporation MI Corporation
Voice Communications Corp. Greater Detroit Newspaper Network, Great Northern Publishing, Inc. MI Corporation Inc. MI Corporation MI Corporation
Up North Publications, Inc. Saginaw Area Newspapers, Inc. MI Corporation MI Corporation
July 14, 2011