Deal struck for papers' sale, court OK needed - Ahwatukee Foothills News: Localnews

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Deal struck for papers' sale, court OK needed

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Posted: Tuesday, February 16, 2010 12:00 am

 

Freedom Communications filed a motion Tuesday with the U.S. Bankruptcy Court in Delaware seeking approval of the sale of its Phoenix-area publications — including the Ahwatukee Foothills News and the Tribune in Mesa — to 1013 Communications LLC, an affiliate of Thirteenth Street Media.

In a statement, Freedom officials said they hope a court hearing will take place in early March and that the transaction can be completed shortly thereafter. The sale is subject to the approval of the federal judge overseeing Freedom’s Chapter 11 proceedings and is contingent on no other higher or better offers for the Valley publications.

The purchase price is $2.05 million, according to court documents.

"We believe this transaction is in the best interests of our employees, customers and the communities we serve," Freedom officials said in the statement.

Freedom, based in Irvine, Calif., has been reorganizing under Chapter 11 of the federal bankruptcy code since September.

Freedom asked in Tuesday’s filing that any other bids be submitted by March 5. If additional qualifying bids are submitted, Freedom said it would conduct an auction on or before March 8 to determine the highest and best bid.

Pending court approval of the sale, Freedom said it will continue to publish and distribute its Valley publications, including the Daily News-Sun in Sun City, Glendale-Peoria Today, Surprise Today, the Ahwatukee Foothills News and the Tribune. It will also operate its Arizona Interactive Media Group, which publishes the Clipper, a monthly direct mail product, and the Ahwatukee.com, YourWestValley.com and EastValleyTribune.com and Web sites. All of those properties are included in the sale.

Thirteenth Street Media, based in Boulder, Colo., is publisher of the Explorer, a 50,000-circulation free-distribution weekly in suburban north Tucson, and the Telluride (Colo.) Daily Planet, a free-distribution daily.

A tentative agreement for the sale of the Tribune to Thirteenth Street Media was announced in November, and the deal was expanded to include the other Freedom publications in the Valley in January.

Prior to the announcement of the tentative agreement, Freedom has said that it would close the Tribune but continue to publish the Sun City and Ahwatukee newspapers.

The final asset purchase agreement filed with the court Tuesday does not include the Tribune building in downtown Mesa. Randy Miller, owner of Thirteenth Street Media, has said he will continue to operate at 120 W. First Ave., Mesa, for about a year after the sale, but he will seek a new permanent home for the Tribune.

Freedom has announced the deal would result in a "substantial" number of existing associates who would keep their jobs. After the sale is finalized, associates will be given offer letters from 1013 Communications, and those associates who do not receive offers will be eligible for severance.

In court documents, Freedom said its efforts to sell the Tribune from the second half of 2008 met with only limited interest except for Thirteenth Street Media. Only one other unidentified buyer submitted a formal expression of interest to purchase the newspapers, the document said.

"However, that party’s proposed purchase price was lower than (Thirteenth Street Media’s), and that party was unable to demonstrate that it had the financial wherewithal to consummate the transaction," the document said.

Another unnamed party submitted a formal expression of interest in some of Freedom’s Valley assets but did not wish to purchase the Tribune or Arizona Interactive. Three other parties informally expressed interest in purchasing only one business unit, the document said.

"(Freedom officials) have determined in their business judgment that a transaction to sell only some of the . . . assets would be undesirable," the company said in the filing. "Specifically, many of the functions of the business units are integrated in Phoenix, Arizona, thus making it difficult to sell individual business units. Moreover, any transaction that excluded the East Valley Tribune newspaper and the Arizona Interactive Media Group would have left (Freedom) with significant employee severance obligations."

Freedom estimated it would incur about $1.5 million in shutdown costs if the sale is not completed.

Miller is a former executive of the Gannett and Lee Enterprises media chains. He was owner of the Colorado Daily newspaper in Boulder, Colo. from 2001 until selling it to E. W. Scripps Co. in 2005.

 

 

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