Bankruptcy Stories: The daily newspaper, the Boston Herald filed for Chapter 11 Bankruptcy on December 8, 2017. The paper, founded in 1846, cited pension liabilities, declining revenue, digital media, and growing competition as reasons for its decision to file. The Herald has debts and other financial obligations totally just over $31 million. The bulk of the financial obligations are to pensions and severance packages to employees. Its current assets total roughly $6 million in cash on hand and money it is owed.
At the time of filing, the Boston Herald employed 240 people, including 120 employees in the newsroom. It is currently continuing its day-to-day operations.
The Boston Herald is looking for a buyer. Soon after the bankruptcy filing, the Boston Herald reached a tentative deal to sell itself to GateHouse Media. However, another bidder has come in with a higher offer. The Revolution Capital Group of Los Angeles filed a bid for $5.75 million to buy the Boston Herald. Revolution is asking the federal bankruptcy court to review their offer over GateHouse Media’s initial $5 million bid. Both bidders stated they expect to keep 175 of the Herald’s 240 employees.
Any sale of the Boston Herald must be approved by the Chapter 11 Bankruptcy Trustee and the Bankruptcy Court, which is expected to set an auction date soon.
In response to the bankruptcy filing, Patrick J. Purcell, President and Publisher at Boston Herald Inc., wrote “In addition to great news and advertising coverage for our dedicated readers over the years, all I ever wanted to do was keep the Boston Herald alive,” he went on: “It is with this pending sale that I am able to do that in these difficult newspapering times. I am certain this is the best pathway forward for you and for the newspaper we have nurtured together, in my case, for the last 33 years.”
While it seems a number of the Herald’s employees will not get to keep their jobs, there is hope that the paper itself will continue under new ownership.
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