Unsecured creditors want bankruptcy court to stop quick auction of Brown Publishing
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Unsecured creditors want bankruptcy court to
px; overflow-x: hidden; overflow-y: hidden;">stop quick auction of Brown Publishing
Times-Gazette, County Shopper parent company could be sold at June 28 auction
Unsecured creditors were in U.S. Bankruptcy Court in Long Island, N.Y., June 22 to "slow down an impending auction of Brown Publishing’s newspapers" according to a report this week by Mark Fitzgerald of Editor and Publisher (www.editorandpublisher.com).
"In court papers, the official committee of unsecured creditors say the court should give 'heightened scrutiny' to the sale because it was Roy Brown, General Counsel Joel Dempsey and CFO Joseph Ellingham – the sole owners of 'Brown Media', who handpicked the independent director negotiating the sale of Brown Publishing," Fitzgerald wrote.
An auction for Brown Publishing had been scheduled for Monday, June 28. According to www.editorandpublisher.com, "Brown Media has made a so-called 'stalking horse' offer, the initial offer in a bankruptcy auction, of $15.3 million – for assets that would be free of debts and encumbrances. Brown’s Chapter 11 filing says the company has debt totaling $104.6 million." Brown Publishing said its properties had a value of $94.1 million. PNC Bank, Brown Publishing’s biggest creditor and owed $70.5 million, has said it has offered $20 million for the newspaper chain. Brown Media was incorporated on March 26, and is 100 percent owned by Roy Brown, Joel Dempsey, and Joseph Ellingham, B.
Brown 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.
Unsecured creditors were in U.S. Bankruptcy Court in Long Island, N.Y., June 22 to "slow down an impending auction of Brown Publishing’s newspapers" according to a report by Mark Fitzgerald of Editor and Publisher (www.editorandpublisher.com).
"In court papers, the official committee of unsecured creditors say the court should give 'heightened scrutiny' to the sale because it was Roy Brown, General Counsel Joel Dempsey and CFO Joseph Ellingham – the sole owners of 'Brown Media,' who handpicked the independent director negotiating the sale of Brown Publishing," Fitzgerald wrote.
An auction for Brown Publishing had been scheduled for Monday, June 28. However, The Dayton Daily News (www.daytondailynews.com) reported this weekend that the sale of Brown Publishing papers could be moved to July.
DDN staff writer Ben Sutherly wrote that "The potential sale of Brown’s assets to a company comprised of three of its executives drew the ire of a committee of Brown’s unsecured creditors. 'The only beneficiaries of the proposed sale are the insiders of the debtors, if they are the successful purchasers, and the senior lenders of the debtors, who will receive all of the net proceeds, possibly leaving the estates administratively insolvent, and nothing for general unsecured creditors,' the creditors’ representatives wrote in a June 11 court filing."
DDN staff writer Ben Sutherly wrote that "The potential sale of Brown’s assets to a company comprised of three of its executives drew the ire of a committee of Brown’s unsecured creditors. 'The only beneficiaries of the proposed sale are the insiders of the debtors, if they are the successful purchasers, and the senior lenders of the debtors, who will receive all of the net proceeds, possibly leaving the estates administratively insolvent, and nothing for general unsecured creditors,' the creditors’ representatives wrote in a June 11 court filing."
According to www.editorandpublisher.com, "Brown Media has made a so-called 'stalking horse' offer, the initial offer in a bankruptcy auction, of $15.3 million – for assets that would be free of debts and encumbrances. Brown’s Chapter 11 filing says the company has debt totaling $104.6 million."
Brown Publishing said its properties had a value of $94.1 million. PNC Bank, Brown Publishing’s biggest creditor and owed $70.5 million, has said it has offered $20 million for the newspaper chain. Brown Media was incorporated on March 26, and is 100 percent owned by Roy Brown, Joel Dempsey, and Joseph Ellingham, three top executives of the bankrupt Brown Publishing Co.
Brown Publishing said its properties had a value of $94.1 million. PNC Bank, Brown Publishing’s biggest creditor and owed $70.5 million, has said it has offered $20 million for the newspaper chain. Brown Media was incorporated on March 26, and is 100 percent owned by Roy Brown, Joel Dempsey, and Joseph Ellingham, three top executives of the bankrupt Brown Publishing Co.
Brown 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.
The Wall Street Journal's online edition reported that "Brown Publishing said the sale will only result in enough money to pay first-lien lenders, explaining that that group is deeply undersecured. There's simply not enough money for unsecured creditors, which fall farther back in line to be paid, the publisher said. … (A) delay could jeopardize the debtors' ability to continue … and threaten the jobs of some 800 employees."
For more on this story, go to The Wall Street Journal online edition at http://online.wsj.com/article/BT-CO-20100623-708718.html
[[In-content Ad]]The Wall Street Journal's online edition reported that "Brown Publishing said the sale will only result in enough money to pay first-lien lenders, explaining that that group is deeply undersecured. There's simply not enough money for unsecured creditors, which fall farther back in line to be paid, the publisher said. … (A) delay could jeopardize the debtors' ability to continue … and threaten the jobs of some 800 employees."
For more on this story, go to The Wall Street Journal online edition at http://online.wsj.com/article/BT-CO-20100623-708718.html