Monday, November 9, 2015
L.A. Times Offers 0% Loan to Buy OC Register
L.A. Times Offers 0% Loan to Buy OC Register
by Chriss W. Street 7 Nov 2015 Newport Beach, CA
After the Orange County Register filed an emergency bankruptcy at 1 a.m. on Sunday morning, Tribune Publishing, the owner of the Los Angeles Times, surprised a federal court hearing with $3 million zero rate interest loan to keep the Register and Riverside’s Press-Enterprise operating in what appears to be a move to gain monopoly control of SoCal newspaper publishing.
The bankruptcy was forced after minority shareholders in the investment group that bought Freedom Communications, the publisher of the Orange County Register and Press-Enterprise, filed a lawsuit asking the Delaware Chancery Court to put the company into receivership, according to a report by Law360.
The complaint was unsealed after the bankruptcy, and claimed operations needed independent oversight because the company was “insolvent and in financial distress from mismanagement.”
Chicago’s Tribune Publishing, which already acquired the Times and the San Diego Union-Tribune, made a surprise proposal during a hearing in November 3 in the Santa Ana U.S. Bankruptcy Court to offer zero-interest debtor-in-possession financing to keep the Register and Press-Enterprise operating. The offer requires the Tribune to be the first creditor paid and that the cash serve as a “refundable deposit” in any bid it may make for the newspapers and their corporate parent, Freedom Communications.
William N. Lobel of Lobel Weiland Golden Friedman LLP, who has been near the top of the Southern California “Super Lawyers” list compiled by Los Angeles Magazine for the last 13 years, represented Freedom Communications in the bankruptcy case.
Lobel had submitted the Freedom Communications plan to keep the newspaper going with a high-interest-bearing $3 million loan from business lender Silver Point Capital, which is already owed $19 million by Freedom. Lobel said that if Tribune is serious about the loan, Freedom will accept the offer due to significant savings compared to the Silver Point loan.
Aaron Kushner, who preached the virtues of local journalism and a print product, bought Freedom Communications in 2012 for $50 million and the assumption of pension liabilities. But bankruptcy documents reveal the company lost over $40 million in the last two years during a rapid expansion under Kushner as CEO.
Kushner left in April and Rich Mirman became Freedom’s CEO and Publisher. The bankruptcy is Freedom Communications’ second in six years.
Many Santa Ana businesses had expected local developer Michael Harrah to buy the Register after he bought the paper’s 175,000-square-foot building, located just off Interstate 5 in Santa Ana, in September 2014. Harrah paid $27 million for the building and then leased it back to the newspaper for 20 years.
Harrah has been trying to build a massive 37 story building to “transform the city from a Mexican slum to a gentrifying wonderland,” according to a story by the OC Weekly’s Gustavo Arellano. Arellano added, “Harrah dropped mucho dinero with the Register on a nearly-weekly Sunday “sponsored content” series in the paper focusing on his vision of SanTana.”
Lobel said he expects there will soon be an auction for Freedom’s remaining assets: two newspapers and real estate surrounding the news organization’s operations.
Besides Harrah and Tribune, current Freedom CEO and Publisher Rich Mirman said that he is trying to put a local investor group together to bid for the Register and Press-Enterprise. Other rumored parties interested in bidding include Gannett Co., publisher of USA Today, and L.A. billionaire Eli Broad.
Tribune and Freedom Communications have been involved in a heated legal battle over the Times’ distribution of Register newspapers, according to the Register. Their relationship imploded last year after Tribune filed a lawsuit in state court claiming the Register failed to pay $4 million for its services. The case will now be handled by the federal bankruptcy court.
Despite the feud, Tribune could create a profitable Southern California newspaper monopoly by acquiring the Register and Press-Telegram and gaining big economies of scale.
Orange County Register
Orange County Register is a Freedom Communications, Inc. newspaper.
Note: Aaron Kushner was the CEO for Freedom Communications, Inc., and a publisher for the Orange County Register.
Margot Roosevelt is a reporter for the Orange County Register, and was a reporter for the Los Angeles Times.
Los Angeles Times is a subsidiary of the Tribune Publishing Co., was a subsidiary of the Tribune Media Co., and the Chicago Tribune.
David D. Hiller was a publisher & president & CEO for the Los Angeles Times, an SVP for the Tribune Publishing Co., the SVP for the Tribune Media Co., the publisher & president & CEO for the Chicago Tribune, a partner at Sidley Austin LLP, and is a member of the Commercial Club of Chicago.
Sidley Austin LLP was the bankruptcy adviser for the Tribune Media Co.
Miles D. White was a director at the Tribune Media Co., and is a member of the Commercial Club of Chicago.
William A. Osborn was a director at the Tribune Media Co., and is a member of the Commercial Club of Chicago.
R. Eden Martin is the president of the Commercial Club of Chicago, and counsel at Sidley Austin LLP.
Michelle Obama was a lawyer at Sidley Austin LLP.
Newton N. Minow is a senior counsel at Sidley Austin LLP, and a member of the Commercial Club of Chicago.
Kathleen L. Brown is a member of the Commercial Club of Chicago, and California state government governor Jerry Brown’s sister.
Cyrus F. Freidheim Jr. is a member of the Commercial Club of Chicago, and an honorary trustee at the Brookings Institution (think tank).
James A. Johnson is an honorary trustee at the Brookings Institution (think tank), a member of the American Friends of Bilderberg (think tank), was a director at the Gannett Co., Inc., a director at the KB Home, and a 2008 Bilderberg conference participant (think tank).
Foundation to Promote Open Society was a funder for the Brookings Institution (think tank), the Carnegie Endowment for International Peace (think tank), and the Harlem Children's Zone.
George Soros was the chairman for the Foundation to Promote Open Society, and a benefactor for the Harlem Children's Zone.
Jessica Tuchman Mathews was an honorary trustee at the Brookings Institution (think tank), the president of the Carnegie Endowment for International Peace (think tank), is a director at the Nuclear Threat Initiative (think tank), a director at the American Friends of Bilderberg (think tank), and a 2008 Bilderberg conference participant (think tank).
Ed Griffin’s interview with Norman Dodd in 1982
(The investigation into the Carnegie Endowment for International Peace uncovered the plans for population control by involving the United States in war)
Carnegie Endowment for International Peace (think tank) was a funder for the Nuclear Threat Initiative (think tank).
Warren E. Buffett is an adviser for the Nuclear Threat Initiative (think tank), and an advisory board member for the Everytown for Gun Safety.
Eli Broad is an advisory board member for the Everytown for Gun Safety, the founder of KB Home, and was a purchase bidder for the Tribune Media Co.
Ronald W. Burkle was a director at KB Home, and a purchase bidder for the Tribune Media Co.
Los Angeles Times was a subsidiary of the Tribune Media Co.
Michael R. Bloomberg is the founder of Everytown for Gun Safety, a co-chair for Mayors Against Illegal Guns, was a contributor for the Americans for Responsible Solutions, and a benefactor for the Harlem Children's Zone.
Everytown for Gun Safety is a “Gun Safety” group for guns.
Mayors Against Illegal Guns is a “Gun Safety” group for guns.
Americans for Responsible Solutions is a “Gun Safety” PAC for guns.
Posted by Sam and Bunny Sewell at 10:13 PM