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.
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