As Brown Publishing bankruptcy auction nears, unsecured creditors ask court to halt credit bid
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Media news website EditorandPublisher.com reports this week that "unsecured creditors who are likely to walk away with nothing after the (July 19) auction of Brown Publishing Co. asked Bankruptcy Court Monday, July 12 to stop the chain’s biggest lender from submitting a so-called credit bid for the newspaper chain when bids are due Friday, July 16.
This was the second time the official committee of unsecured creditors have attempted to delay the auction, in which a company owned by three Brown Publishing top executives, including CEO Roy Brown, have made a 'stalking horse' bid of $15.9 million for the owner of 15 dailies, 32 paid weeklies and numerous other business and niche publications." E&P reported that Brown Publishing’s biggest lender, PNC Bank, has said in court filings it intends to make a credit bid — using debt instead of new cash — of $20 million for the company. PNC is owed more than $74 million. Under a previous ruling by U.S. Bankruptcy Judge Dorothy Eisenberg, PNC will not have to put up a 5% cash deposit with its bid. "The unsecured creditors say allowing PNC to bid up to $74 million in credit alone has a chilling effect on other potential bidders for the newspapers," E&P reported.
Lawyers for Brown Publishing have argued the “deeply subordinated” unsecured creditors are desperately trying to stir up litigation in hopes of a financial settlement. There is not enough money in the bankruptcy estate for even senior creditors, they argue.
With an auction date set for Monday, July 19, the final day for bids on newspapers owned by the bankrupt Brown Publishing Company is Friday, July 16. The terms of the sale, as well as a listing of creditors and related company information is posted online at www.editorandpublisher.com.
The hearing for approval of the sale was scheduled for July 22.
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.
For more information, go to www.editorandpublisher.com.[[In-content Ad]]
This was the second time the official committee of unsecured creditors have attempted to delay the auction, in which a company owned by three Brown Publishing top executives, including CEO Roy Brown, have made a 'stalking horse' bid of $15.9 million for the owner of 15 dailies, 32 paid weeklies and numerous other business and niche publications." E&P reported that Brown Publishing’s biggest lender, PNC Bank, has said in court filings it intends to make a credit bid — using debt instead of new cash — of $20 million for the company. PNC is owed more than $74 million. Under a previous ruling by U.S. Bankruptcy Judge Dorothy Eisenberg, PNC will not have to put up a 5% cash deposit with its bid. "The unsecured creditors say allowing PNC to bid up to $74 million in credit alone has a chilling effect on other potential bidders for the newspapers," E&P reported.
Lawyers for Brown Publishing have argued the “deeply subordinated” unsecured creditors are desperately trying to stir up litigation in hopes of a financial settlement. There is not enough money in the bankruptcy estate for even senior creditors, they argue.
With an auction date set for Monday, July 19, the final day for bids on newspapers owned by the bankrupt Brown Publishing Company is Friday, July 16. The terms of the sale, as well as a listing of creditors and related company information is posted online at www.editorandpublisher.com.
The hearing for approval of the sale was scheduled for July 22.
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.
For more information, go to www.editorandpublisher.com.[[In-content Ad]]