SaltWire Network files for creditor protection, has $94M in debt
A company that owns near‐ ly two dozen newspapers in Atlantic Canada has debts of almost $100 million and is filing for creditor protec‐ tion.
SaltWire Network made the application in the Supreme Court of Nova Scotia, according to court documents filed on Monday.
The court documents said SaltWire has more than $94 million in debt, with roughly a third of that owed to its lender, Fiera Private Debt.
SaltWire also owes more than $7 million in unpaid HST to the Canada Revenue Agency, while the Chronicle
Herald owes $2.6 million for missed pension plan pay‐ ments, the documents said.
Fiera's lawyers filed an ap‐ plication in court on Monday saying SaltWire doesn't have the assets to pay back the money it owes.
It said the company has only made one-third of its debt payments over the last five years, the court docu‐ ments said. The documents said Fiera gave SaltWire until the end of January to send a letter of intent illustrating how the debt will be repaid, but they did not hear back from the company.
Fiera said SaltWire has been "demonstrably misman‐ aged" and has withheld mon‐ ey from employees and pen‐ sioners.
Documents filed by Nor‐ ton Rose Fulbright Canada LLP, which is representing Fiera, said it lost faith in SaltWire's management team, which had "displayed a repeated failure to properly manage" the business.
Last week, SaltWire was ordered to pay $500,000 as a security bond in connection to a separate legal matter re‐ lating to the 2017 purchase by SaltWire of more than two-dozen Transcontinental newspapers.
SaltWire was also recently ordered to pay $70,000 for failing to stay up to date with pension plan payments.
Some of the company's daily newspapers include the Chronicle Herald and the Cape Breton Post in Nova Scotia, the Telegram in St. John's, and the Guardian in Charlottetown. It also oper‐ ates weekly newspapers.
What SaltWire is saying
In a statement, the com‐ pany said filing for creditor protection will help ensure the company's long-term sustainability.
"SaltWire Network is con‐ fident that the ... process will enable us to emerge as a stronger, more vibrant media company," said chief operat‐ ing officer Ian Scott.
"We are dedicated to con‐ tinuing our legacy of provid‐ ing insightful, local journal‐ ism and contributing posi‐ tively to the communities we serve."
Scott also said the "un‐ precedented challenges" Canadian media have faced in recent years and "pres‐ sures created by multination‐ al social media networks" have negatively impacted the company's financial health.
Union reaction
Willy Palov, president of the Halifax Typographical Union, which represents workers at the Chronicle Her‐ ald, said it was hard news to hear, but correspondence he has seen from the company leaves room for optimism.
"They acquired a lot of properties from Transconti‐ nental and they have pension debt and tax debt so those are outside our sphere of in‐ fluence," Palov said.
"We know that those fi‐ nancial challenges are what's behind what's going on now and revenues dropping does‐ n't help that."
University of King's Col‐ lege journalism professor Stephen Kimber said the company bit off more than it could chew with its acquisi‐ tion of regional newspapers.
He said it was bad man‐ agement to buy other news‐ papers by borrowing money in a market that is on a downward trend.
"I don't think they would have been in great shape anyway just because of the state of the industry," he said.
"But they're in awful shape now, and they have mostly only themselves to blame."
According to Kimber, it may be slow and painful but ultimately the company's fi‐ nancial position will result in the loss of two dozen news‐ papers
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