Report says Brown Publishing insiders can't close bankruptcy deal; PNC Bank eyed as possible buyer of newspaper chain
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Report says Brown Publishing insiders can’t close bankruptcy deal;
PNC Bank eyed as possible buyer of newspaper chain
x; width: 1px; height: 1px; overflow-x: hidden; overflow-y: hidden;"> Brown Media, a company founded by Brown Publishing Company CEO Roy Brown and two other top executives of the bankrupt newspaper publisher cannot close the auction sale because its financial backers have pulled out of the deal, according to a report this week by Mark Fitzgerald, editor of EditorandPublisher.com.
Brown Publishing Co. filed for Chapter 11 bankruptcy relief earlier this year.
"The development is the latest twist in a most unusual newspaper bankruptcy case," Fitzgerald wrote. "Brown Media, the entity wholly owned by Roy Brown, Brown Publishing, CFO, Joseph Ellingham and its general counsel, Joel Dempsey, last month were declared the winners of the bankruptcy auction with a bid of $22.4 million for all but one of its dailies, 29 of its 32 paid weeklies and 11 business journals. When Brown Publishing filed for bankruptcy May 1, it declared liabilities of $104.6 million and said its properties had a book value of $94.1 million."
According to the report, "Brown Publishing said PNC Bank, which led the group of its senior creditors, should be declared the winner of the auction now because it was second-highest bidder. PNC expects to close the sale no later than Sept. 3, Brown Publishing said in the filing, in which asked the bankruptcy court to let it use cash collateral to continue operating through that date.
"Unless permission is given to use cash collateral, Brown Publishing said, it 'will be forced to shut down their operations and liquidate all assets, resulting in a disastrous loss of value for their respective estates as well as a corresponding decrease in the value of the first lien lenders’ collateral.'"
U.S. Bankruptcy Court Judge Dorothy Eisenberg ruled Thursday, July 29 in favor of the sale of Ohio-based newspaper chain to a group of company insiders led by Roy Brown and two of his top executives, Joe Ellingham and Joel Dempsey, The Associated Press reported.
Eisenberg ruled that Brown Media Corp. could purchase the majority of the Brown Publishing Company chain for $22.4 million and also approved the purchase of two of Brown's Ohio newspapers, the Van Wert Times and the Ada Herald, to Delphos Herald, Inc., the AP said.
Eisenberg rejected the sale of three real estate parcels in Ohio. Brown Media was the lone bidder on the properties, offering $10,000 for parcels in Urbana, Xenia and Bellevue, according to reports.
These properties were valued at several hundred thousand dollars, and Eisenberg said they had not been properly marketed for the highest possible sale price.
"> According to Bloomberg News (www.bloomberg.com), "The official committee of creditors with unsecured claims opposed the real estate sale, claiming that Brown accepted the $10,000 bid for three parcels even though they might be worth more than $555,000.
"Shareholder Windjammer Capital Investors LLC also opposed the sale."
Brown Publishing owns The Times-Gazette and County Shopper in Hillsboro, as well as newspapers in surrounding counties, including: The Wilmington News Journal and Star Republican, The Record Herald in Washington C.H., The People's Defender in West Union, The News Democrat in Georgetown and The Ripley Bee.
Brown Media, a company founded by Brown Publishing Company CEO Roy Brown and two other top executives of the bankrupt newspaper publisher cannot close the auction sale because its financial backers have pulled out of the deal, according to a report this week by Mark Fitzgerald, editor of EditorandPublisher.com.
Brown Publishing Co. filed for Chapter 11 bankruptcy relief earlier this year.
"The development is the latest twist in a most unusual newspaper bankruptcy case," Fitzgerald wrote. "Brown Media, the entity wholly owned by CEO Roy Brown, Brown Publishing CFO Joseph Ellingham and its general counsel, Joel Dempsey, last month were declared the winners of the bankruptcy auction with a bid of $22.4 million for all but one of its dailies, 29 of its 32 paid weeklies and 11 business journals. When Brown Publishing filed for bankruptcy May 1, it declared liabilities of $104.6 million and said its properties had a book value of $94.1 million."
According to the report, "Brown Publishing said PNC Bank, which led the group of its senior creditors, should be declared the winner of the auction now because it was second-highest bidder. PNC expects to close the sale no later than Sept. 3, Brown Publishing said in the filing, in which it asked the bankruptcy court to let it use cash collateral to continue operating through that date.
"Unless permission is given to use cash collateral, Brown Publishing said, it 'will be forced to shut down their operations and liquidate all assets, resulting in a disastrous loss of value for their respective estates as well as a corresponding decrease in the value of the first lien lenders’ collateral.'"
U.S. Bankruptcy Court Judge Dorothy Eisenberg ruled Thursday, July 29 in favor of the sale of Ohio-based newspaper chain to a group of company insiders led by Roy Brown and two of his top executives, Joe Ellingham and Joel Dempsey, The Associated Press reported.
According to the report, "Brown Publishing said PNC Bank, which led the group of its senior creditors, should be declared the winner of the auction now because it was second-highest bidder. PNC expects to close the sale no later than Sept. 3, Brown Publishing said in the filing, in which it asked the bankruptcy court to let it use cash collateral to continue operating through that date.
"Unless permission is given to use cash collateral, Brown Publishing said, it 'will be forced to shut down their operations and liquidate all assets, resulting in a disastrous loss of value for their respective estates as well as a corresponding decrease in the value of the first lien lenders’ collateral.'"
U.S. Bankruptcy Court Judge Dorothy Eisenberg ruled Thursday, July 29 in favor of the sale of Ohio-based newspaper chain to a group of company insiders led by Roy Brown and two of his top executives, Joe Ellingham and Joel Dempsey, The Associated Press reported.
Eisenberg ruled that Brown Media Corp. could purchase the majority of the Brown Publishing Company chain for $22.4 million and also approved the purchase of two of Brown's Ohio newspapers, the Van Wert Times and the Ada Herald, to Delphos Herald, Inc., the AP said.
Eisenberg rejected the sale of three real estate parcels in Ohio. Brown Media was the lone bidder on the properties, offering $10,000 for parcels in Urbana, Xenia and Bellevue, according to reports.
These properties were valued at several hundred thousand dollars, and Eisenberg said they had not been properly marketed for the highest possible sale price.
According to Bloomberg News (www.bloomberg.com), "The official committee of creditors with unsecured claims opposed the real estate sale, claiming that Brown accepted the $10,000 bid for three parcels even though they might be worth more than $555,000.
"Shareholder Windjammer Capital Investors LLC also opposed the sale."
Brown Publishing owns The Times-Gazette and County Shopper in Hillsboro, as well as newspapers in surrounding counties, including: The Wilmington News Journal and Star Republican, The Record Herald in Washington C.H., The People's Defender in West Union, The News Democrat in Georgetown and The Ripley Bee.
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