< Back to All News

Objections filed in MediaNews bankruptcy

When MediaNews Group, owner of the Mercury News and other Bay Area dailies, announced on Jan. 22 that it was filing a “prepackaged” Chapter 11 bankruptcy petition, it said in a news release:

Chief executive Dean Singleton went on to say, “We already have the support and approval of our lenders, so we expect our plan to proceed through this process swiftly and smoothly.”

According to the Denver Business Journal and the Denver Daily News, three creditors have filed objections in U.S. District Bankrupty Court to Singleton’s bankruptcy plan that would pay creditors 18 cents on the dollar but give his management group 20% of the new company that will emerge from the bankruptcy proceedings. More objections could come before Thursday’s deadline.

According to the two Denver publications (which are following it closely because MediaNews is based there), the objections have been filed by:

• Greenco Inc., a subsidiary of the Tribune Co., which claims it is owed $8.4 million and intends to sue MediaNews for that amount of money. It still wants to be able to sue for the money after the bankruptcy.

• Bank of New York Mellon Trust Co., which says it is currently in negotiations with MediaNews in an attempt to be repaid for money it loaned. The amount due wasn’t given. It was apparently filing an objection to protect its rights to the money.

• Warner Gateway Properties, landlord of the Los Angeles Daily News, which said it doesn’t want the newspaper company to assume its own lease without proof it can pay.

According to the Business Journal:

The Denver Daily News says that if Singleton’s bankruptcy plan is rejected by the court, his No. 2, Jody Lodovic, would feel the pain. Documents filed previously in the bankruptcy case indicate that Lodovic will get a $500,000 bonus if the bankruptcy petition is approved. Documents also show that Lodovic could get as much as $2.25 million this year while chief executive Singleton is in line to get $1.49 million.

< Back to All News