ACN, MORRIS SEEK WAYS OUT OF TROUBLE.
Two troubled newspaper publishing companies in recent days have pushed back decision-making dates regarding their futures. American Community Newspapers Inc. of Dallas and Morris Publishing Group LLC of Augusta, Ga., will make future-altering decisions in the next few days.
ACN, which filed for bankruptcy on April 28, said on Friday that though it had an offer in hand from its secured creditors to buy the company outright. David Brauer, media writer for the web site MinnPost.com, reported on Thursday that the company's lenders, Bank of Montreal and General Electric Capital Corp., had offered $37 million for the company, which included $5 million that ACN already has, a debtor-in-possession made last month.
Brauer reported that the company's unsecured creditors had filed a motion with the bankruptcy court on Wednesday to delay the sale to the bank and GE Capital, saying that while the duo had earlier promised pay trade creditors in full, they were now saying that they'd "pay a small pro-rata portion" of those bills.
ACN's bankruptcy judge, Kevin Carey of Delaware, will decide the sale's fate tomorrow.
ACN owns three small dailies, 83 weeklies and 14 niche publications in four markets around the country, including Northern Virginia, Minneapolis/St. Paul, Dallas and Columbus, Ohio.
At Morris, the issue is of a $9.7 million interest payment on senior subordinated notes that had originally been due Feb. 1.
Morris said on Friday that its lenders had further extended the payment to June 12. Additionally, the privately held company said that it had secured an agreement with its senior bank group wherein they wouldn't call a default on Morris' bank loans because of the lack of payment on the notes' interest.
Morris Publishing owns 13 dailies and 28 non-dailies, as well as shoppers and magazines, and is a division of Morris Communications Co., which also owns outdoor advertising, visitor publications, magazines and radio stations.
ACN's banks may well be able to finish up their Section 363 sale without a hitch -- there apparently was another offer, but it was for one portion of the business, not the whole thing -- but they'd shouldn't be trying to screw the small creditors.