Observer staff

The Observer's parent company, Western Communications, filed for protection Tuesday under Chapter 11 of the federal bankruptcy code. Through the process, Western Communications plans to reduce debt and strengthen operations at its news organizations in Oregon and California.

“This is the only way we can preserve our creditors’ investments and our owners’ interests in valuable community assets,” said Betsy McCool, chairwoman of Western Communications. “Common to our industry, we will put great energy into creating a new future for our media company.”

Western Communications previously filed for Chapter 11 protection in August of 2011 following a three-year dispute with the Bank of America, the company’s largest creditor at the time. The company emerged from Chapter 11 protection in April 2012. In addition to The Observer, Western Communications owns five newspapers in Oregon and two in California, including the Baker City Herald, and The Bulletin in Bend.

The Chapter 11 process allows companies to reorganize while remaining in operation.

“This will give us time to further restructure our organization for a changing media world, a process we have been undergoing, as most newspapers have,“ said John Costa, president of Western Communications.

“That restructure is critical to continuing to serve our local communities in California and Oregon,” Costa added.