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OC Register Owner to File Chap. 11: Report

The owner of the <I>Orange County Register</I> is expected to declare bankruptcy this week, a report says.

IRVINE, Calif. (

TheStreet

) --

Freedom Communications

, the owner of the

Orange County Register

, is expected to declare bankruptcy this week, the

Wall Street Journal

reports, as it suffers from a decline in advertising much like the rest of the newspaper business.

Freedom, which also owns more than 30 other daily papers and eight TV stations, has reached agreements with its lenders to restructure its debts, the report says, citing people familiar with the situation.

Robert Emmers, a spokesman for Freedom, declined to comment Sunday on the possibility of a bankruptcy filing, but he told the

Associated Press

that the company is "continuing to work with its lenders to resolve (its) balance sheet issues."

The company's lenders, which hold about $770 million in debt, are expected to take control of Freedom as it operates under bankruptcy protection, according to the

Journal

. The lenders include

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JPMorgan Chase

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,

SunTrust Banks

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and

Union Bank of California

.

The bankruptcy filing would be a blow to private-equity firms

Blackstone

(BX) - Get Blackstone Inc. Report

and

Providence Equity Partners

, which acquired a 40% equity stake in the company in 2004 for about $460 million, the

Journal

notes. The deal, which used a relatively small amount of debt, already has been written down to zero by both firms.

"Freedom has been affected by the same thing that all the media companies have been affected by: the decline of advertising, which has been accelerated by the downturn in the economy," Emmers told the

AP

. "Freedom has been working really hard to realign its balance sheet with the reality of the media market today."

A recent report from the Newspaper Association of America said print ad sales for newspapers plunged by more than 30% in the second quarter from a year earlier, the worst decline on record.

-- Reported by Joseph Woelfel in New York

.

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