Sun-Times Media Group Inc., reeling from a painful revenue decline and tax liabilities that date back to the looting of the company during the tenure of former CEO Conrad Black, disclosed Tuesday that it has filed for protection from creditors under Chapter 11 of the federal bankruptcy code.
The publisher of the Chicago Sun-Times and other Chicago-area papers emphasized that it will continue to operate its newspapers and online sites as usual while it focuses on further improving its cost structure and stabilizing operations" during the Chapter 11 financial reorganization.
Tuesday's filing can't be characterized as a surprise. Many observers have marveled that the company has been able to stay on its feet as long as it has, given the pressures it faces.
The bankruptcy comes on the heels of a proxy fight that led to the ouster earlier this year of almost all of Sun-Times Media's former board members, and the subsequent exit of CEO Cyrus Freidheim, the turnaround expert brought in two years earlier to revive the company's fortunes.
Freidheim had been given the unenviable job of cleaning up the mess left after Conrad Black and his lieutenant, David Radler, diverted millions of dollars' in company revenue into their own pockets. Sun-Times' fortunes were also damaged by an embarassing and costly circulation-overstatement scandal that occurred when Radler was publisher of the Chicago Sun-Times.
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