Sorry for the light posting schedule today; I’ve been chewing through Strib bankruptcy filings for nuggets relating to the drivers’ standoff over a $20 million pension liability. There’s some very interesting stuff, but the item’s not quite ready yet.
In the meantime, an affidavit from the Strib’s restructuring consultant reveals that last month, company revised its financial projections — downward.
Apparently, the long-term business plan Blackstone Advisory Services gave the Strib in December didn’t make it six months. Blackstone senior managing director Paul P. Huffard says “continuing negative trends in the newspaper industry [and] the economy” resulted in “the deterioration of the company’s financial condition.”
The affidavit doesn’t detail the revisions, but notes previously reported operating losses (exclusive of bankruptcy costs) since the Jan. 15 bankruptcy filing: $500,000 in for the last two weeks of January, $1.4 million in February, and $700,000 in March.
Although the Strib has over $36 million in cash as of the March report, the monthly numbers still have to turn black for the company to get out of Chapter 11. In a separate affidavit, publisher Chris Harte says further labor-cost cuts, including shucked pension contributions, “will enable the company to generate sufficient cash flows to maintain operations.”
So far this year, the Strib has agreed to deals with its three biggest unions for at least $10 million in annual savings. The drivers have agreed in principle to give back about $330,000 a month; if the company wins on pensions, the monthly savings could soar to over $400,000. That wouldn’t plug the monthly deficits thus far, but it’s unclear how much of the labor savings have been realized in the first-quarter reports. April’s figures are due out any day.