Posted by Bud on September 03, 2009 at 16:13:59:
Sun-Times sale appears near
By: Mike Colias and Lorene Yue
Sept. 03, 2009
(Crain's) -- Sun-Times Media Group Inc. appears to be near a deal to sell the struggling media firm.
Lawyers for the company have been crafting a "sale motion," formally asking the federal Bankruptcy Court judge to allow a sale of the firm's assets, according to court documents. Sun-Times' lawyers have spent many hours in discussions with a potential buyer and were reviewing a "letter of intent" as of late July, the documents say.
Union leaders are expected to meet with company officials Thursday afternoon to hear an update on efforts to sell Sun-Times, which publishes the Chicago Sun-Times and more than 50 community newspapers.
While court papers do not name the potential bidder, records show that Sun-Times' lawyers held several hours of telephone conferences with officials from Mesirow Financial Holdings Inc., whose chairman, James Tyree, said last spring that he was leading a group of private investors in a potential buyout of the money-losing newspaper chain, which filed for Chapter 11 bankruptcy protection in March.
The details were included in a court filing from Kirkland & Ellis LLP -- the law firm representing Sun-Times in its bankruptcy proceedings -- requesting approval of its legal fees. Its lawyers billed many hours spent discussing the "sale process and due-diligence activities" with Sun-Times executives.
Mr. Tyree in early May said he had reviewed Sun-Times' financial books and had discussed a possible bid with company executives. But he hasn't spoken publicly about the issue since then, and he has not returned calls seeking comment.
On July 30, employees of Rothschild Inc., the New York investment bank that Sun-Times hired in March to help sell the publishing company, accompanied a potential buyer on a tour of Sun-Times facilities to examine its "operations, production, distribution and personnel," according to court documents.
Fred Eychaner, owner of Chicago's Newsweb Corp., reportedly has talked to Sun-Times management, too. A spokesman for Mr. Eychaner declined to comment. Newsweb owns a TV station in Colorado, as well as radio stations and printing presses.
A buyout offer would toss a lifeline to Sun-Times, which is running short of money. The company's cash position dwindled to $19.3 million in July, when it posted a $3.6-million operating loss, a court document shows. Creditors in July expressed concern that the company couldn't sustain such losses for long and needed to find a buyer.
Sun-Times Chairman Jeremy Halbreich couldn't be reached for comment Thursday, but a spokeswoman for the company said it is "pleased with the progress" of sale efforts so far.
The company plans to close its Pioneer Press printing plant in Northfield, which employs about 70 workers, the Chicago Tribune reported Thursday, citing an official from the Newspaper Guild of Chicago.
It's unclear whether Sun-Times officials would demand further concessions from the unions to pave the way for a sale.
Any sale agreement is subject to an auction in which other bidders can tender higher offers. The final sale requires approval from a federal Bankruptcy Court judge.