Sun-Times files for bankruptcy

The rump of Conrad Black’s former newspaper empire, Sun-Times Media, filed for bankruptcy protection last week, citing the burden of paying the disgraced press baron’s legal fees as one of its financial woes.

Previously known as Hollinger International, the Chicago-based Sun-Times group once controlled a global network of papers — including Britain’s Daily and Sunday Telegraph — built up by Black, who controlled the business until he was caught plundering money from shareholders in 2003.

The company, which owns the Chicago Sun-Times and 58 UK papers, said it was struggling to cope with a slump in advertising on top of tax and legal liabilities dating back to previous management.

“The significant downturn in print advertising that has affected newspapers across the country has continued to severely impact us,” said chair Jeremy Halbreich.

“Unfortunately, this deteriorating economic climate, coupled with a significant pending tax liability dating back to previous management, has led to today’s difficult action.”


Sun-Times has been struggling to settle a $600-million dispute with tax authorities dating back to a period between 1996 and 2003 when Black served as chief executive. An indemnity clause guaranteeing that the company would protect its directors against legal action has also proved costly as Black and a clutch of senior executives were convicted of fraud and jailed in 2007.

A spokeswoman for Sun-Times said that as of September, the cost of defence fees for former executives had reached $117.9-million. “We’re now a small newspaper company,” she said.

“That’s a lot of money for a small company.”

Sun-Times has unsuccessfully gone to court to escape the indemnities. Costs continue to mount as Black recently petitioned the supreme court in the hope of overturning his six-and-a-half-year prison sentence. Black’s appeal lawyer, Miguel Estrada, declined to comment.

Several major US newspapers have shut as commercial revenue collapses, including the Seattle Post-Intelligencer and Denver’s Rocky Mountain News.

The Chicago Tribune is also operating under bankruptcy protection as the owner, Sam Zell, struggles to renegotiate $13-billion of debts.

“They’re up against the elephant in the market in the Tribune,” said John Morton, an independent newspaper analyst.

“Second newspapers, in those places where they still exist, are having a tougher time in this downturn.”

According to its bankruptcy filing, Sun-Times has assets of $479-million and debt of $801-million. The company has been looking for buyers for its papers for more than a year. Its shares were delisted from the New York Stock Exchange last year after it failed to meet listing requirements. —

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

Social protection policies can help to combat Covid-19, and mitigate its effects

The global pandemic has highlighted the importance of national health insurance, mandatory sick leave and unemployment benefits

Algeria’s independent press fears for its survival

Algeria's "democratic spring" that followed widespread protests in October 1988 put an end to a state monopoly of the media.

​Media – Afentse ‘Fenny’ Lekolwane

Her Flave Productions company produces both short films and movies, and “Botswood” was set up to bring the film industry together.

Weary world beggared by borrowing

About 95 countries are either in a debt crisis or facing one, but South Africa isn't one of them.

Pistorius trial puts new media ecology to the test

The murder trial of Paralympian Oscar Pistorius has provided a stark depiction of how the media landscape is changing under our feet.

Transformation in news boardrooms doesn’t match newsrooms

The print and digital media transformation task team has said the change within newsrooms has not been matched at a managerial level.
Advertising

Subscribers only

Toxic power struggle hits public works

With infighting and allegations of corruption and poor planning, the department’s top management looks like a scene from ‘Survivor’

Free State branches gun for Ace

Parts of the provincial ANC will target their former premier, Magashule, and the Free State PEC in a rolling mass action campaign

More top stories

‘Veteran’s stripes’ vs ‘kind and fair’

This weekend the Democratic Alliance will choose between two starkly different visions for its future

The high road is in harm reduction

While the restriction of movement curtailed the health services for people who use drugs in some parts of the world, it propelled other countries into finding innovative ways to continue services, a new report reveals

Khaya Sithole: Tsakani Maluleke’s example – and challenge

Shattering the glass ceiling is not enough, the new auditor general must make ‘live’ audits the norm here in SA

The shame of 40 000 missing education certificates

Graduates are being left in the lurch by a higher education department that is simply unable to deliver the crucial certificates proving their qualifications - in some cases dating back to 1992
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday