Former newspaper owner wants share of sale proceeds

By Kyla Asbury | Mar 29, 2018

CHARLESTON – MediaNews Group is seeking a share of the money made from the sale of the Charleston Gazette-Mail to HD Media, according to court documents.

MediaNews filed an objection on March 27 in U.S. Bankruptcy Court for the Southern District of West Virginia.

MediaNews wrote that when the bankruptcy cases were filed, it was the debtors moved for approval of and procedures for the sale of substantially all of the debtors’ assets and the relief sought was for the benefit of all of the creditors, according to the objection.

However, on March 16, the debtors filed the disbursement motion, seeking an order authorizing them to distribute the net sale proceeds to United Bank upon closing on March 30.

Although the purpose stated and relied upon by debtors for the relief they have requested from the court throughout these proceedings has been maximizing recovery for all creditors and stakeholders, the debtors “now ask this court to approve a distribution of assets that will benefit only one (1) creditor, United Bank, and will ‘swallow up Chapter 11’s safeguard’ for all of the remaining creditors,” the objection states.

“Debtors’ disbursement motion will ‘short circuit the requirements of Chapter 11’…is in opposition to the objective of the bankruptcy system and therefore should be denied,” according to the objection.

MediaNews claims it is owed the amount of $3,795,000, which is the amount from the final arbitration award it was to receive from the civil case it filed last September.

In its response to the objection, Daily Gazette Company and its affiliates said the objectors were criticizing them for engaging in a value-maximizing strategy through Chapter 11, ”which strategy was unquestionably designed to achieve the highest and best bid for the Debtors’ assets.”

“Indeed, this is the only strategy that was available to the Debtors that had a chance of generating enough value to enable general unsecured creditors to share in a distribution,” the debtors wrote. “It is unfair, in hindsight, to criticize the Debtors and their Sale process because it turns out that general unsecured creditors are out of the money. That does not change the fact that the Debtors properly invoked chapter 11 to dispose of their assets for the benefit of all creditor constituencies.”

Daily Gazette Company wrote that the objectors have failed to demonstrate that they are acting in violation of any express provision of the Bankruptcy Code or that their intentions are inappropriate or unwarranted under the circumstance.

“Accordingly, the court should overrule the objection and grant the motion,” the debtors wrote.

The sale of the Gazette-Mail to HD Media is scheduled for March 30.

U.S. Bankruptcy Court for the Southern District of West Virginia case number: 2:18-bk-20028

Want to get notified whenever we write about Charleston Gazette-Mail ?

Sign-up Next time we write about Charleston Gazette-Mail, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

Charleston Gazette-Mail

More News

The Record Network