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Eric McMillan put together a team of investors to buy The Town Crier when it went into receivership.Gloria Nieto/The Globe and Mail

Jennifer Gardiner knew the end was near for The Town Crier when the paycheques stopped.

After 30 years of selling ads for the chain of community newspapers, she knew things weren't going well for the papers and their parent company, Multimedia Nova Corp. The days were clearly numbered – readers complained about distribution, suppliers weren't being paid and ad sales were down as salespeople quit in frustration.

But the papers were still profitable, and Ms. Gardiner would sit around talking with co-workers about how things would be different if they could take control of the nine papers themselves and leave Multimedia Nova to the stable of ethnic newspapers that comprised the bulk of the company's revenue.

She's about to find out if that's true: She is one of five employees who have bought the chain of community newspapers at an auction after the sudden bankruptcy of Multimedia Nova this summer. The papers have been serving nine of Toronto's toniest neighbourhoods, with editions targeted at Bloor West Village, Leaside-Rosedale and the Beach, but were shuttered in May because of troubles at the parent company.

While the city's dailies focused on large issues, Town Crier reporters were asking those who live beside proposed condo developments how the new buildings would change on-street parking. There were no stories about the Leafs or Raptors – but when an East York organization lost the coach of its atom basketball team, the Town Crier ran with the story.

"We all felt they had really taken their eyes off the ball and didn't let us do community news as well as we could," Ms. Gardiner said in the newspaper's new one-room office in a battered St. Clair Avenue East low-rise. "Now that I'm back out there, advertisers are still asking for newspapers. They are happy to see us back."

The small group of employees are betting their future on community news, at a time when print advertising is decreasingly rapidly for publishers around the world. The owners believe the papers were a profitable casualty of their parent company's debt – Multimedia Nova was dragged down after news that it lost its deal with the Italian government, which accounted for the bulk of its revenue and funded its flagship Corriere Canadese newspaper.

But the industry is deeply challenged. Metroland – a large chain of community newspapers owned by Torstar Corp. – saw its print advertising drop by almost 10 per cent in its last quarter. Sun Media, which also owns dozens of community papers, saw a drop closer to 15 per cent.

"The outlook really depends on the community," said Gordon Cameron, who was managing editor of the Town Crier prior to its receivership and serves as the president of the Ontario Community News Association (he chose not to invest in the employee buyout). "In some communities these papers are the only way to reach people. In a larger community like Toronto, there are multiple ways to reach them."

The new ownership group – which also includes the business manager, accounts manager and distribution manager – won't say what they paid for the chain, which claimed it had a million readers a month as its 167,000 printed copies were passed around.

That they were able to buy the newspapers at all speaks to the challenges facing the newspaper industry. Print advertising has been declining as advertisers find new ways to reach their customers, although the pace of decline at community papers has been slightly slower than at large dailies because they are less reliant on the spending whims of large national advertisers.

"There are a lot of private and independent schools drawing from our neighbourhoods," said Ms. Gardiner, who is now the chain's associate publisher. "The bigger advertisers will go to the dailies, but there are a lot of businesses and services that want to speak directly to our residents."

The resurrected company will only serve three neighbourhoods (an area loosely bounded by Bloor Street to the south, Highway 401 to the north, Bathurst Street to the west and Bayview Avenue to the east) with a print run of 60,000. The owners have spent a lot of time over the past month working out printing and distribution and reassuring suppliers that they will be quicker to pay bills than they were under their former owners.

"I know a lot of big players have previously looked at buying the Town Crier," said editor and publisher Eric McMillan, who put the team of investors together once the receivership was official. "It was a bit of a surprise when we found out we had won – I think the bad news maybe scared some others off, but we have worked here for years and know how solid it's been."

The new owners know what they are up against but remain convinced they've bought a sustainable business. They've moved their offices to the heart of their refined coverage area, and most of their employees – the number is in flux, but Mr. McMillan and Ms. Gardiner counted 14 on staff after rattling off names and counting on their fingers – will work from home to cut down on costs.

"I think we're in a much better position to control our destiny than we were," said Ms. Gardiner. "We were busting our butts, but we kept disappointing readers and advertisers because of diminishing page counts and distribution problems."

The first edition is being sent to the printers on Sept. 6 and destined to hit the street Sept. 12. Long-time readers shouldn't expect any major surprises: Launch-day stories include the sale of a Bedford Park Canada Post station and a simmering landlord-tenant dispute in a historic Leaside building.

One thing is clear as the papers get their finishing touches applied: If the papers find themselves back in receivership, there won't be any parent company to blame this time around.

"I like to think of ourselves as a centre for the community to exchange views and not just a newspaper," said Mr. McMillan, who was the paper's first full-time employee 31 years ago and worked at other jobs before returning a few years ago. "I think newsprint will always be a big part of the future. I really think print will always come out on top. I'm optimistic."

Editor's note: This article has been modified from an earlier version that incorrectly stated that Gordon Cameron was the publisher of the Town Crier. He was the managing editor.