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WEST VIRGINIA RECORD

Friday, March 29, 2024

Gazette-Mail to declare bankruptcy; Wheeling paper is current high bidder

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CHARLESTON – The owners of The Charleston Gazette-Mail have agreed to declare Chapter 11 bankruptcy.

Charleston Newspapers is planning to file for bankruptcy on Jan. 30.

Wheeling Newspapers currently is the highest bidder to assume ownership of the company, according to an article posted Jan. 29 on the Gazette-Mail’s site.

Employees were issued WARN notices by Charleston Newspapers, the owner of the Gazette-Mail. The notices warn of potential layoffs. A Worker Adjustment and Retraining Notification Act notice is required when potential layoffs could exceed 50. Charleston Newspapers currently employees a little more than 200 employees.

Wheeling Newspapers could decide to maintain current employees, but it remains unknown and Charleston Newspapers issued the notices under their attorneys’ advice. The company owns more than 40 daily newspapers, including the Wheeling, Parkersburg, Martinsburg and Elkins newspapers in West Virginia.

"I join [Charleston] Mayor Danny Jones in recognizing that this is truly the end of an era, and I also urge the new owners to provide the current employees with an opportunity for employment," Kanawha County Commission President Kent Carper said in a press release. "We can not quantify the benefit that the Charleston Gazette, the Daily Mail, and recently the Charleston Gazette-Mail provided to the Kanawha Valley and its people.

"During times of war, times of tragedy, and times of great joy, our local paper always brought to the public true, professional journalism. Today is a sad day."

Once Charleston Newspapers file for Chapter 11, it would start a two-month countdown until new ownership could take over. Also, there would be a 30-day window in which other potential buyers could come forward to make offers.

Earlier this month, a federal judge upheld a $3.8 million arbitration ruling against the Charleston Gazette-Mail.

U.S. District Judge Thomas Johnston granted the petitioner’s petition to confirm the arbitrator’s award and denied the respondent’s motion to vacate the arbitrator’s award Jan. 19.

The newspaper filed a motion to vacate the arbitrator’s award Sept. 21 in the U.S. District Court for the Southern District of West Virginia.

MediaNews Group Inc. — the former owner of the Charleston Daily Mail — said it did not consent to the combination of Charleston’s two daily newspapers two years ago and that it is entitled to back-payments, plus payments of an annual management fee until the year 2024.

The company also claims www.dailymail.com was sold without consent.

Edward D. McDevitt, the arbitrator, ruled in MediaNews’ favor.

In the newspaper’s Sept. 21 response, the attorneys claim that the domain name sale and the combination of two newspapers were a financial necessity — that default on its loan with United Bank was at hand and that bankruptcy would have been necessary if two newspapers had continued operating into the next year.

The arbitration order says the Daily Gazette Company and the Daily Gazette Holding Company LLC, the companies that run Charleston Newspapers and the Charleston Gazette-Mail, must pay MediaNews Group Inc. and Charleston Publishing Company, the former owners of the former Charleston Daily Mail, $3,795,000 plus post-judgment interest for three primary claims the former publishers of the Daily Mail had made.

Although the Daily Mail’s and Gazette’s joint business operations were known as Charleston Newspapers, the Daily Gazette Company owned the Gazette and MediaNews owned the Daily Mail.

Both companies had 50 percent stakes in Charleston Newspapers until 2004 when MediaNews sold out to the Daily Gazette Company for a reported $55 million.

The Chilton family has owned a Charleston newspaper since 1907, when the family of Charleston politician, lawyer and business William E. Chilton bought the city’s Daily Gazette and renamed it the Charleston Gazette.

Chilton became publisher of the newspaper in 1917, after he lost his re-election bid to the U.S. Senate.

Chilton’s son, W.E. Chilton II, and grandson, W.E. “Ned” Chilton III, also served as publisher. Ned Chilton ran the paper from 1961 until his death in 1987.

U.S. District Court for the Southern District of West Virginia case number 2:17-cv-03921

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