Alden Global Capital principal Randy Smith’s recent decision to pull out of negotiations to combine the Philadelphia Inquirer with Journal Register Co. may have contributed to Journal Register’s bankruptcy filing.
JRC, with papers in Connecticut including The New Haven Register, and New York’s Hudson Valley, yesterday filed for bankruptcy — for the second time.
Smith’s Alden Global hedge fund blamed crippling pension costs, but there’s more to the tale.
In September 2010, Smith and rival hedge fund Angelo, Gordon teamed up to pay $139 million for the Philadelphia Media Network, which owned the Philadelphia Inquirer.
The plan was to combine Alden’s JRC with the jointly owned Philadelphia Media Network, several sources said.
Combining the two would create tens of millions in savings, sources said.
But when Alden and Angelo, Gordon couldn’t agree on how the savings would be split, Alden backed out of the deal to merge the two.
By the time PNN was sold, it brought in just $55 million, less than half what the two hedgies had paid for it.