Creditors are asking a bankruptcy judge for subpoena power to investigate New Haven Register publisher Journal Register Co. and one of its biggest lenders, JPMorgan Chase Bank.
Lawyers for an official committee of unsecured creditors said in a court filing that they want to investigate the company’s debt and its conduct in negotiations with JPMorgan before it sought Chapter 11 bankruptcy protection. Those creditors also want to know how the proposed reorganization plan was formulated and how the value of the company was decided.
The creditors asked U.S. Bankruptcy Judge Allan Gropper to give them access to relevant documents and witnesses.
Journal Register also publishes the Middletown Press and newspapers in Pennsylvania and other states. It already has sold two the New Britain Herald and Bristol Press and closed several weeklies, including the Hershey (Pa.) Chronicle.
In bankruptcy cases, unsecured creditors are behind bank lenders such as JPMorgan in claims, meaning they might get none or little of what they are owed.
Prior to its bankruptcy filing on Feb. 21, Yardley, Pa.-based Journal Register reached agreement with JPMorgan and most other lenders to a reorganization plan that involves canceling its stock and becoming a private company controlled by its lenders. Since then the company has moved to try to emerge from bankruptcy protection quickly.
A call to a Journal Register lawyer and an e-mail to a JPMorgan spokeswoman were not immediately returned.
Under its current timeline, the owner of such newspapers as the New Haven Register in Connecticut would file the details of its reorganization plan by April 14. Creditors proposed they could finish their investigation by April 13.
Bankruptcy lawyers for the company have scheduled an April 20 hearing for the court to consider its disclosure statement, which is a plain-language description of its reorganization plan. If it is approved, the company can begin soliciting votes for its plan. (AP)
