NEW YORK — Freedom Communications Inc., the owner of the Tribune and Orange County Register, is expected to file for Chapter 11 bankruptcy protection this week, according to a published report.
The Wall Street Journal reported on its Web site Sunday that the privately held company has reached agreements with its lenders to restructure its debts. The report cited unnamed people familiar with the situation.
A phone message left Sunday at Freedom's Irvine, Calif., headquarters was not immediately returned. The Journal quoted an unnamed Freedom spokesman who said, "We are continuing to work with our lenders to address our balance sheet."
Freedom's lenders were expected to take control of the company while it operates under bankruptcy protection, the Journal reported. The lenders — including J.P. Morgan Chase & Co., SunTrust Banks and Union Bank of California — hold about $770 million in debt.
Freedom was founded in the 1930s by R.C. Hoiles and is still majority owned by the Hoiles family. Besides its flagship Orange County Register, the company owns 32 daily and 77 weekly newspapers, plus several television stations.
Family members representing about one half of the Hoiles clan sold their stake in the company more than five years ago when private-equity firms Blackstone Group and Providence Equity Partners acquired a 40 percent share for about $460 million. The stake of the remaining family members likely would be wiped out by a bankruptcy filing, the Journal said.
Freedom's Chapter 11 filing would be the latest in a long line of bankruptcy cases involving media companies that have struggled with a sharp drop in advertising revenue brought on by the growth of the Internet and compounded by a long recession.
Freedom announced last month that it would reduce pay across the board by 5 percent, and the Register has announced cost-cutting measures this year including layoffs, unpaid furloughs and salary freezes.