The Sun-Times Media Group Inc, owner of the Chicago Sun Times and more than 50 other US newspapers, filed for bankruptcy protection on Tuesday as it became the latest casualty of the advertising slump that is wreaking havoc throughout the newspaper industry.
The company said it would continue to operate as usual as it tries to stabilise its operations, though it said it was ordering all non-union employees to take a week of unpaid leave in April or May. The company listed assets of $479 million and debts of $801 million.
The move makes The Sun-Times the second Chicago publishing company to seek bankruptcy protection after the Chicago Tribune Company, which publishes The Chicago Tribune and The Los Angeles Times newspapers, filed for court protection in December.
However the newspaper industry is suffering nationwide. Earlier this month, Hearst Corp shut down the print operations of the Seattle Post-Intelligencer and turned it into a Web-only publication.
Denver's Rocky Mountain News also closed down in February, while in January the owner of the Minneapolis Star-Tribune filed for bankruptcy. Even the mighty New York Times was forced to sell its flagship headquarters to maintain its cash flow in March, shortly before it announced sweeping job cuts.
Sun-Times chairman, Jeremy L. Halbreich, blamed the ongoing recession, coupled with the flight of readers to the internet, for forcing the company to seek bankruptcy protection.
"The significant downturn in the print advertising environment that has affected newspapers across the country has continued to severely impact us," he said. "Unfortunately, this deteriorating economic climate, coupled with a significant, pending IRS (Internal Revenue Service) tax liability dating back to previous management, has led us to today's difficult action."