Posted by Bud on September 24, 2009 at 17:45:33:
From Ann Saphir at Crain's Chicago Business today:
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Sun-Times cost cuts boost cash
By: Ann Saphir
Sept. 24, 2009
(Crain's) -- Sun-Times Media Group Inc. took in more cash than it spent in August, thanks to aggressive cost cuts ahead of a planned sale to a group led by Mesirow Financial Inc. CEO James C. Tyree.
The parent of the Chicago Sun-Times boosted its cash balance by $1.9 million last month, marking its first period of positive cash flow since it filed for bankruptcy protection on March 31, a court filing shows.
It still lost $1.5 million on operations, including some expenses that aren't paid out in the month but must be accounted for anyway, but that's less than half the $3.6 million it lost in July. Wage cuts and format changes to some of the company's 58 suburban papers contributed to the cost savings, a spokeswoman said.
Mr. Tyree and the investor group agreed earlier this month to buy the media company for $5 million in cash and $22 million in assumed liabilities. But Mr. Tyree says the bid depends on the company's 18 unions keeping in place for the next three years the pay cuts they agreed to shortly after the bankruptcy filing. He's also insisting that the unions agree to other changes that some leaders say gut their contract.
A handful of unions have rejected those concessions. They have until Sept. 29 to agree, or Mr. Tyree will withdraw the bid, he has said.
Lawyers on the case were in Bankruptcy Court in Delaware on Thursday trying to convince the judge that the protections Sun-Times extended Mr. Tyree, including as much as $1 million in breakup fees and expense reimbursement should the Sun-Times choose another bidder, are reasonable. The bankruptcy trustee and the unsecured creditors' committee have filed some objections to the terms.