Bankruptcy judge approves sale

October 09, 2009 03:54:48 PM

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The Chicago Sun-Times said Thursday that a bankruptcy judge had approved the sale of the ailing newspaper to a group of local businessmen.

Bankruptcy judge Christopher Sontchi gave the green light to the sale of the Sun-Times Media Group, which includes the Sun-Times and its sister papers, to the group of investors led by Chicago banker James Tyree, the newspaper said.

It said Tyree's group had offered about 25 million dollars -- five million dollars in cash and about 20 million dollars in liabilities -- for the flagship Sun-Times and its more than 50 sister publications.

"Great! That’s what we’ve been waiting to hear," a Sun-Times staffer said when informed that the sale had been approved.

There were gasps of relief as others heard the news, with one staffer proclaiming "we live to fight another day."

But then the usual silence fell upon the gutted newsroom where more than twice as many desks sat empty as filled.

The Sun-Times said the sale to the group led by Tyree, a native Chicagoan with a reputation for turning around companies, is expected to close by the end of October.

Most of the Sun-Times Media Group's 16 unions have approved steep pay cuts and other concessions which accompanied the bid.

"We're very pleased and very excited with this result," said Sun-Times Media Group interim chief executive Jeremy Halbreich. "It could not have happened without the dedication and hard work of our employees."

The Sun-Times filed for bankruptcy protection in March, the latest victim of the crisis in the US newspaper industry.

According to Halbreich, the company was losing between 200,000 dollars and 300,000 dollars a week.

Its top creditor is the US government. The Sun-Times Media Group owes up to 608 million dollars in back taxes and penalties from past business practices by its former owner, Conrad Black, who is currently serving a six-and-a-half-year jail term for fraud.

Besides the Sun-Times, the company owns a string of weeklies and suburban papers including the SouthtownStar, Beacon News (Aurora), Courier-News (Elgin), Herald News (Joliet), Lake County News-Sun (Waukegan) and Naperville Sun.

The US newspaper industry has been reeling from a steep drop in print advertising revenue, steadily declining circulation and the migration of readers to free news online.

Several other US newspaper groups have also declared bankruptcy including the Tribune Co., owner of Chicago's other major daily, the Chicago Tribune, the Los Angeles Times and other newspapers.

The Rocky Mountain News of Denver, Colorado, shut down in February and the Seattle Post-Intelligencer ended its print edition in March and reemerged as an online-only publication with a greatly reduced staff.