Los Angeles Times owner Tribune Publishing today put a loan proposal on the table to help sustain the parent company of the Riverside Press-Enterprise and Orange County Register as it copes with a second round of bankruptcy proceedings.
Tribune’s $3 million interest-free loan offer comes a day after filings in U.S. Bankruptcy Court by Freedom Communications indicating that the Santa Ana-based company has $1,043,733 “in cash on hand with which to operate …and fund these Chapter 11 cases.”
Freedom outlined a plan for a $3 million loan from Silver Point Capital, which is already owed $19.46 million, to “pay employee wages and benefits, procure goods and services integral to the debtors’ ongoing business operations, fund certain operational expenses … maintain ordinary course relationships with vendors, suppliers and customers, and satisfy working capital needs in the ordinary course.”
Tribune’s loan proposal requests that it take first-in-line status among creditors to get its bills paid in the bankruptcy settlement, adding that the $3 million could serve as front money for any bid the publisher makes to buy Freedom’s assets, according to the Register.
GlassRatner, hired by Freedom to prepare a financial plan, anticipates that the firm would need $3 million to remain operationally effective over the next 26 weeks.
The PE became a Freedom asset in November 2013 after a sale was closed between the OC firm and Dallas-based A.H. Belo Group, which had operated the newspaper for 16 years.
Then-Freedom CEO Aaron Kushner described the paper as an “incredibly important” outlet for the community.
By the time the deal was finalized, the PE had slashed staffing levels by more than a third, and the Riverside County Board of Supervisors had authorized the Economic Development Agency to acquire the paper’s one-time headquarters at 3540 14th St. in downtown Riverside for $30 million, in what critics described as a quasi bailout.
The building is now occupied by staff from the county’s Department of Information Technology, and the PE’s main office is on Chicago Avenue.