MINNEAPOLIS -- Less than two years after it was purchased by a private equity group, the Star Tribune said Thursday night it has filed for reorganization under Chapter 11 bankruptcy.
"We determined that the filing was necessary to reduce our operating costs, restructure our debt and create a financially viable business for the future," Publisher and Chairman Chris Harte said in a note to readers posted by the newspaper.
Harte said the filing would allow Minnesota's largest newspaper to continue business as usual as it restructures.
The filing came a week after the Star Tribune and the Newspaper Guild ended talks, saying they were unable to agree on management's request for concessions.
"Obviously, I think it's unfortunate. It's not our decision, it's the company's, and we take very seriously the future of the newspaper," Graydon Royce, co-chairman for the Star Tribune's unit of the Guild, said of the bankruptcy filing.
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Royce added that Star Tribune employees are "very committed to keeping this institution alive."
Union leaders said the bankruptcy filing, while expected, came as a surprise.
"They did not give us prior notification that this was going to be filed today," Royce said.
Avista Capital Partners, a private equity firm, purchased the Star Tribune in 2007 for $530 million.
In its filing, the Star Tribune said it listed assets of $493.2 million and liabilities of $661.1 million.
The Star Tribune has been dealing with declining print advertising, like many newspapers.
Last fall, the Star Tribune skipped a $9 million quarterly debt payment to senior creditors to save cash as it tried to restructure its debt.
Since 2007, the Star Tribune has made $50 million in cuts through attrition, layoffs, buyouts and other cost-cutting measures.
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In December, Harte told employees the "survival of the company" was at stake and asked labor unions to agree to $20 million in cuts by mid-January. Without those cuts, Harte said the newspaper could face bankruptcy.
The Star Tribune ranked as the nation's 15th-largest paper last October, with weekday circulation of about 322,000 and Sunday circulation of almost 521,000. The paper has nearly 1,400 employees.
