Atlantic newspaper owner Saltwire faces insolvency

A private equity fund is initiating insolvency proceedings against Atlantic newspaper owner Saltwire Network Inc., claiming it owes tens of millions of dollars after several years of mismanagement.

In documents filed to the Supreme Court of Nova Scotia on Monday, Fiera Private Debt Fund said Saltwire and The Halifax Herald Ltd. together owe it $32.7 million, plus almost $600,000 of accrued and outstanding interest.

About three-quarters of that debt is owed by Saltwire, which owns a number of news publications across Atlantic Canada including Halifax’s Chronicle Herald, the Telegram in St. John’s and the Guardian in Charlottetown.

Fiera said in the filings that senior management of the company mismanaged the business, used employee pension funds for operations and failed to remit HST, among other allegations.

It said in the documents the companies are insolvent and “on the verge of a liquidity crisis.”

Saltwire itself has applied for creditor protection under the Companies’ Creditors Arrangement Act, its chief operating officer Ian Scott said in a statement Monday evening. Scott said it’s a strategic move to address the company’s financial challenges and ensure its long-term sustainability.

He said the “unprecedented challenges” facing the media industry in Canada have affected Saltwire’s operations and financial health. However, he said operations will continue as usual, as the company hopes to restructure its finances and operations and is taking every measure to minimize the effect of the process on stakeholders. “We remain fully committed to delivering high-quality journalism and maintaining the trust and support of our communities,” said Scott.

Saltwire has applied for creditor protection, a move its CEO hopes will address the company’s financial challenges and ensure its long-term sustainability