The date has been set. U.S. District Judge Kevin J. Carey of the bankruptcy court in Wilmington, Delaware, on Tuesday set a date of March 4 to hear the MediaNews Chapter 11 case.
The deadline to file objections is Feb. 4. To object, go to PDF page 139 (numbered in the document as page 124) in the MNG disclosure notice for instructions.
Appearing before Judge Carey was Kathryn A. Coleman of Hughes Hubbard and Reed, the Manhattan law firm representing MNG.
She briefly recited the situation — that the bankruptcy plan would reduce the company’s debt from $930 million to $178 million.
Judge Carey seems to get a lot of media bankruptcy cases. Recently he approved $45.6 million in Tribune Company bonuses. Here’s a link to a union site where he was criticized.
Contrary to earlier reports, Hearst will remain a shareholder in MediaNews, and will probably do better than other creditors. Hearst’s share of MNG’s non-Bay Area assets will go from 31% to 14%. While that sounds like a haircut, Hearst will retain more of its $317 million investment in MNG than other shareholders, who will only get 19 cents on the dollar.
Nothing in the bankruptcy papers filed so far rules out the idea that MNG and Hearst might try to swing a deal to sell the Chron to Singleton, as was discussed a couple of years ago.
In fact, media venture capitalist and “Reflections of a Newsosaur” blogger Alan Mutter says this scenario might go down:
- The most likely path in San Francisco would be to add the San Francisco Chronicle, where Hearst has sunk more than a $1 billion since 2000 without seeing much profit, to the chain of newspapers Singleton operates in the Bay Area. The long-running losses at the Chronicle, plus the MediaNews bankruptcy, may be sufficient to persuade regulators that an antitrust waiver is necessary to sustain journalism in Northern California. As an added argument in support of a waiver, Hearst could threaten – as it did early in 2009 — to shut the Chronicle, which would make San Francisco the largest American city without a daily newspaper. Adding the Chronicle to his Bay Area juggernaut would enable Singleton to eliminate most ad sales, administrative and back-office positions. At the same time, a consolidation would provide ample opportunities to streamlining production and circulation. This also would result in potentially the deepest cuts yet in the Chronicle newsroom. The Chronicle editorial staff, which has been halved over the years to a couple of hundred traumatized souls, could be thinned yet again to perhaps a couple of dozen individuals. Further insight into Singleton’s operating approach in the Bay Area is offered here.