Atlantic newspaper chain SaltWire Network has filed for bankruptcy protection from its creditors.
The move comes after a private equity fund initiated insolvency proceedings against the media company, claiming it owes tens of millions of dollars and is unable to pay it debts.
In Nova Scotia court, Fiera Private Debt Fund said SaltWire owes it more than $30 million, along with $600,000 of unpaid interest charges.
SaltWire owns several leading newspapers in major cities across Atlantic Canada, including The Chronicle Herald in Halifax, Nova Scotia; the Telegram in St. John's, Newfoundland; and the Guardian in Charlottetown, Prince Edward Island.
In all, SaltWire owns 23 daily and weekly newspapers throughout Atlantic Canada. The company is owned by the Dennis-Lever family that has long owned The Chronicle-Herald newspaper in Halifax, which has been published since 1874.
Sarah Dennis inherited The Chronicle Herald in 2012 after the death of her father. She and her husband Mark Lever formed the SaltWire newspaper chain in 2017 after purchasing multiple other newspapers across Atlantic Canada.
Mark Lever currently serves as the chief executive officer (CEO) of SaltWire Network.
The bankruptcy filing was announced on SaltWire’s website hours after the Fiera Private Debt Fund filed to initiate insolvency proceeding against the publisher.
Fiera said in its court filings that the newspaper company has been mismanaged for years, used employee pension funds to cover operational costs, and failed to remit Harmonized Sales Tax (HST) payments, among other allegations.
The court documents add that SaltWire is “insolvent” and “on the verge of a liquidity crisis.”
As of Jan. 2, SaltWire owes Canada Revenue Agency (CRA) more than $7 million in HST that has been collected but not paid to the federal tax authority.
Fiera Private Debt Fund is seeking to have SaltWire sold or dissolved and position itself as the first lender to be paid back through the court.
It’s unclear how the bankruptcy proceedings will move forward and if SaltWire will seek to restructure and emerge from bankruptcy or if the company will be wound up.
SaltWire Network is a privately held firm. Its stock does not trade on a public exchange.
