Chronicle Herald, SaltWire business issues traced back to 2017

A private debt firm has driven Atlantic Canada’s largest newspaper company, The Chronicle Herald and SaltWire Network, into insolvency.

Supreme Court documents show the media company has filed for creditor protection and is carrying debts totalling more than $94 million.

The bulk of that debt and nearly $33 million is owed to Fiera Private Debt Fund.

According to media critic and author Stephen Kimber, the newspaper company's downfall began in 2017 after a long and drawn-out employee strike at the company's oldest newspaper, The Chronicle Herald

“You are coming to the end of this long and bitter strike and the Herald is in shambles, but instead of trying to figure out what to do with that, they create a company called SaltWire and buy 28 newspapers around the region," said Kimber.

Fiera says SaltWire and the Herald have failed to meet the conditions set out in their borrowing and repayment agreements for more than five years and accuse its business leaders of mismanagement.

Court documents show the Herald, SaltWire and other named companies are owned and managed by CEO Mark Lever and Sarah Dennis through a family trust.

Items filed by Fiera indicate the media company owes $7 million is taxes to Ottawa and $2.6 million to its employee pension fund.

Mark Marshall, who is an insolvency expert, says the media company’s debt situation is dire but believes the restructuring process could be a viable option to keep the media business going, but he also suggests the newspaper company won't ever look the same.

“They are not looking, by the sounds of it, to just shut the thing down and close the doors," said Marshall. "It sounds more like they are trying to make a game plan to make sure everyone is able to get paid and move forward.”

Dalhousie professor emeritus of law Wayne McKay says the amount of debt is startling.

“It seems very hard to imagine how you could come back from this amount of debt and restructure it (the media company) in a way to survive,” said MacKay.

In a press release Monday, Saltwire’s chief operating officer Ian Scott says filing for creditor protection is a court strategy that will help them restructure and says they remain committed to delivering high-quality journalism.

“SaltWire Network is confident that the CCAA process will enable us to emerge as a stronger, more vibrant media company. We are dedicated to continuing our legacy of providing insightful, local journalism and contributing positively to the communities we serve," said Scott in a news release.

MacKay says the Herald is one of the oldest newspapers in the country with a great legacy and he hopes they can remain a viable business, but his main concern is with the journalists whose jobs might be at risk.

"One immediately feels for the employees who are going to be deeply impacted by this and the readers," said MacKay.

That concern was shared at the P.E.I. legislature Tuesday.

“Like many others, I am quite concerned about the potential loss of two of our newspapers here on Prince Edward Island," said Hal Perry, interim leader of the P.E.I. Liberals. "Both the Journal Pioneer and The Guardian have played important historical roles in the province.”

The Herald and SaltWire Network employ almost 400 reporters and other employees across its 23 newspapers, which include its major papers, like the Halifax Chronicle Herald, the Cape Breton Post, The Guardian in Charlottetown, and the St. John's Telegram.

Court proceedings begin Wednesday at the Nova Scotia Supreme Court. 

For more Nova Scotia news visit our dedicated provincial page.