Journal Register Co. Files for Chapter 11

Digital First Media announced Wednesday that its subsidiary Journal Register Company is filing for Chapter 11 bankruptcy, the second time since 2009.

JRC operates , The Mercury in Pottstown and , among other local papers.

JRC filed voluntary petitions for Chapter 11 in U.S. Bankruptcy Court for the Southern District of New York and "will seek to implement a prompt sale," according to Digital First Media.

Digital First Media operates MediaNews Group and Digital First Ventures.

According to a press release from Digital First Media, the auction and sale would take 90 days.

Digital First has reportedly signed a stalking horse bid for JRC from 21st CMH Acquisition Co., an affiliate of the hedge fund that runs Digital First Media, Alden Global Capital LLC.

JRC will continue normal business operation during the sale process, according to the release.

According to a blog written by John Paton, CEO of Digital First Media, JRC had $225 million in debt in 2009, but was able to grow its digital revenue by 235% over the last three years.

While revenue was up 32.5%, expenses were down 9.7% compared to 2009, Paton wrote. Digital expenses were up 151% over the past three years, Paton wrote.

However, print ad revenue declined 19% in the past three years. Print ad revenue is what makes a newspaper profitable, and represented half of JRC's revenues, according to Paton.

Paton wrote that print circulation and circulation revenue also declined over the past three years.

Debt, Paton wrote, was reduced by 28% with JRC servicing more than $160 million of debt.

Revenues in 2005 were about two times bigger than projected 2012 revenues, Paton wrote in his blog. 

According to Paton:

"All of the digital initiatives and expense efforts are consistent with the Company’s Digital First strategy and while the Journal Register Company cannot afford to halt its investments in its digital future it can now no longer afford the legacy obligations incurred in the past."