Bankruptcy expert speculates Star Tribune might go ‘Chapter 22’

According to the Wall Street Journal, turnaround expert Joseph A. Bondi is bumming out folks at 425 Portland by speculating the Star Tribune might become a “Chapter 22” — a cute financial-world expression for businesses that emerge from Chapter 11 bankruptcy, only to return.

In a twoparter I did last month questioning the Strib’s still hefty-debt and optimistic sales projections, Carlson School financial prof Andrew Winton used that exact phrase — actually, he referred to it as “Chapter 22 or even Chapter 33” — for businesses such as United Airlines US Airways that go in and out of bankruptcy repeatedly.

At this point, everyone is speculating, but at least Winton isn’t alone. A Strib spokesman declined to comment to the Journal, citing “unprofessional speculation.”

Comments (10)

  1. Submitted by Hiram Foster on 10/15/2009 - 12:32 pm.

    While I wouldn’t rule out multiple restructurings both inside and outside bankruptcy courts (after all bankruptcy attorneys need to eat too), as long as the owners of the paper owe the money to themselves, the restructurings will be more matters of legal form, than anything having to do with the substantive prospects of the underlying business.

    The business problem of the Star Tribune is very simple. It quite simply needs to bring in more revenue, in ways that don’t cost it too much money. And I don’t see how another trip through the bankruptcy courts does anything at all to solve that problem

  2. Submitted by Hiram Foster on 10/15/2009 - 12:38 pm.

    As long as the Strib’s owners owe the company’s debt to themselves, further bankruptcy proceedings, should there be any, will be about rearranging the ownership structure among themselves as circumstances change over time. Basically, they will be rearranging the deck chairs on a boat they hope is not the Titanic.

  3. Submitted by karl anderson on 10/15/2009 - 12:38 pm.

    With all due candor, you have no idea what the advertising revenues will be going forward. So how can you speculate?

    It is a wild guess at best. You can speculate either way.

  4. Submitted by sam mathews on 10/15/2009 - 12:50 pm.

    “unprofessional speculation.” Yes!!!

  5. Submitted by dan buechler on 10/15/2009 - 02:11 pm.

    Mr Brauer, any updates on a new publisher or what is taking so long? One thing that I find a bit bemusing and sad is the old rights attitude that having a union negotiate between an employee and a employer is a bad idea. They would much prefer a one sided deal where they hold 90% of the cards, kinda like the Yankees. However in this case could the Strib/Avista/whatever other stakeholders saved some millions by more mediation/arbitration perhaps done by a more locally based judge? I’m probably showing my ignorance here but it is worth considering.

  6. Submitted by marley johannson on 10/15/2009 - 09:09 pm.

    No one has any idea what lay ahead in 2010. To say they will definitely go out of business is absurd. Mr. Brauer seems set on riding them out of town. Lets give them a break. I don’t see any media – including Minnpost – doing any better!

  7. Submitted by Hiram Foster on 10/16/2009 - 06:51 am.

    I would be surprised if the Star Tribune ceased business operations in 2010 but I wouldn’t rule that out. While there are obstacles to the possibility, I would be considerably less than surprised if the Strib found a way to merge with the St. Paul in all or maybe just some of their operations.

  8. Submitted by Bruce Adomeit on 10/16/2009 - 03:13 pm.

    David, Perhaps MinnPost should allow comments only from people who are members or who have contributed $10 or more to braublog. That might weed out imaginary users like “marley johannson” who use fictitious names to post anonymous comments that look like they’re from real people.
    Does anyone have a better solution?

  9. Submitted by David Brauer on 10/16/2009 - 03:24 pm.

    Bruce –

    That might be a bit extreme. It’s gotten so old that I just chuckle over the fakers. They’re pretty obvious in their repetition.

    What’s so scary about real names, people? And by that, I mean *your* real name.

  10. Submitted by Howard Miller on 10/19/2009 - 05:45 pm.

    Mr. Brauer

    What is scary about real names? Mostly the real threat of harassment. I’ve received hate mail/communications for things i have printed in the Star Tribune letters to editor opinion option, and for remarks i made on blogs under my full, easily searched and located persona.

    You obviously have the courage to publish openly. I respect and admire that. I do that in my own profession, but not on blogs outside my profession, such as this fine forum.

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