Sun-Times union takes Tyree deal

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: Compromise over concessions pave way for approval by bankruptcy judge : By Julie Johnsson and Michael Oneal | Tribune staff reporters : Chicago financier Jim Tyree took a major step toward becoming a newspaper publisher Wednesday when he finally came to terms with the largest union at Sun-Times Media Group Inc. over concessions at the heart of his $26.5 million rescue bid for the company. : An afternoon agreement between leaders of the Chicago Newspaper Guild and Sun-Times management was ratified by the union's four bargaining groups in heated voting sessions Wednesday evening. : A separate union representing editorial workers at the Post-Tribune of Northwest Indiana was likely to hold its vote Friday, union sources said. : The compromise paves the way for approval of the deal by U.S. Bankruptcy Judge Christopher Sontchi at a bankruptcy court hearing in Delaware Thursday morning. : "I hope we can get everybody on the same page so we can move forward to build a great company," Tyree said Wednesday. : He can count on the support of the committee of unsecured creditors in the case, said Scott Cargill, a partner at Lowenstein Sandler in New Jersey and the committee's lead counsel. : Creditors, which include the Internal Revenue Service, trade vendors and the newspaper company's unions, have lodged some technical objections to the deal, but Cargill expects them to be resolved at Thursday's hearing. : "This is a game-changer," Cargill said of the union breakthrough. "We support the deal on the table." : The hard-won agreement follows weeks of negotiations between the union and Sun-Times management with Tyree participating from outside the room via a relay system through his lawyer. : In a round of voting shortly after Tyree made his offer Sept. 8, union members stridently rejected his demands, which included steep pay concessions and sweeping work rule changes. : But with cash projected to dwindle to $13.4 million by Halloween and management threats of a potential liquidation hanging in the air, Guild members accepted a compromise on work rules hammered out in meetings that lasted until 3 a.m. Wednesday and resumed again at noon. : The contract locks in for three years the 15 percent benefit cuts that workers accepted earlier this year and freezes the company's pension plans, which will be replaced by 401(k)-like plans. : Documents show the bankruptcy estate will not have ample funds to cover the company's pension obligations, meaning the burden will fall in part to the federal Pension Benefit Guaranty Corp. : Management agreed to provide eight weeks of severance for workers who lose their jobs in the first six months after Tyree gains control of the company, providing some assurance against mass layoffs. : The company will void seniority rules, as Tyree had demanded, and it gains the ability to transfer unionized editorial workers between its publications. But it agreed to give employees 30 days notice before moving them to another location. : The company also agreed to preserve a "just-cause" clause in the contract, protecting workers against unwarranted dismissals. : Tom Thibeault, executive director of the 550-member guild, acknowledged that the agreement was painful. But it was an improvement over Tyree's original proposal, which essentially eliminated all work rules and slashed severance from one year guaranteed to four weeks. : "There's a lot of sacrifice in it, a lot of trust," Thibeault said. "Our members certainly are looking at the economic times. We want the Sun-Times to continue on." : Cargill said the company's other creditors also have concluded that their best option is to see the company survive so it can continue paying taxes, buying from its vendors and providing jobs. : A document filed by Sun-Times Media in Delaware bankruptcy court Wednesday drew a grim picture of the alternative -- liquidation. : An analysis done by Huron Consulting Group indicated creditors would not fare any better if the publishing company were shut down and sold. While Sun-Times Media holds assets with a book value of $359.2 million, it would only collect about 15 percent of that total, or $54.3 million if those assets were auctioned in an already depressed market for media properties and real estate, Huron said. : After paying liquidation and administrative costs, the company would have no money to pay unsecured creditors. : The company's printing plants and equipment, worth about $51.3 million on paper, would garner about $3.2 million in a sale, Huron estimated. There is already a glut of printing-press machinery on the market and an over-supply of industrial properties near the company's Ashland Avenue and Plainfield plants. Taking the machinery apart and moving it would damage the buildings and the presses, rendering the equipment "valueless," Brian Linscott, managing director at Huron, said in the filing. : Huron's numbers are only estimates but the reality of the Sun-Times' months-long sales process demonstrated that nobody besides Tyree could make the numbers work, either by proposing to sell the assets or digging in and running the company. : Sun-Times Chairman Jeremy Halbreich said at least two potential bidders visited the "data room" set up by the company's investment bank Rothschild after the Tyree bid. But neither went any further. : Union sources say one of them was attorney Yusef Jackson, the son of civil-rights activist the Rev. Jesse Jackson, who in 2004 teamed with California supermarket magnate Ron Burkle to bid on a company they estimated to be worth more than $800 million. : Jackson didn't return calls for comment. : A twist in the process came Tuesday evening, when Lisle-based investment manager Thane Ritchie came out of the blue with a press release claiming he wanted to formulate a bid with the union to compete against Tyree. : Although the bid deadline had passed Monday, Ritchie said he planned to ask the union to petition the court for a 30-day extension arguing that he had been "wrongly blocked" from meeting with the Guild to talk about his plan. : Thibeault said he met with Ritchie informally for 15 minutes Wednesday and informed him that the union would not agree to press his case at the Thursday hearing. : "We're not involved in that process at all," Thibeault said. : Cargill, the creditor's committee attorney, said he had called Ritchie's representatives following news of the union agreement to see if Ritchie planned to produce a better offer than Tyree's. : But he said the call wasn't returned by mid-afternoon. Scott Denali, a strategic consultant advising Ritchie, did not return a call for comment.

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