By: Jim Rosenberg
The Official Committee of Unsecured Creditors in the Brown Publishing Co. Chapter 11 bankruptcy proceeding at U.S. Bankruptcy Court in Central Islip, N.Y., has filed an objection with respect to the sale of real estate during the July 19-20 asset auction.
The committee argues that “the process pursued by the debtors and its representatives was designed to be anything but a thorough, robust, competitive process.” It opposes acceptance of a bid for three parcels of land, calling the proposed transaction “not even marginally reasonable.”
In a separate filing, Windjammer Mezzanine and Equity Fund II L.P. on July 20 filed a limited objection to the proposed sale of bankrupt Brown Publishing Co. assets based on what it says was the debtors’ failure to file notice with the court identifying the successful bidder and appending a copy of that bidder’s asset-purchase agreement. Windjammer is a minority shareholder in Brown Publishing that is suing the company. See the E&P story here
According to the committee’s filing, five qualified bids were received for Cincinnati-based Brown Publishing’s assets. One bidder was Brown Media Corp., controlled by for Brown Publishing chief Roy Brown and two of his executives. The other bidders were not identified, but the objection notes that the auction resulted in an agreement to four separate transactions with two purchasers. One transaction would be solely for real estate assets.
The committee’ objection states: “In the closing moments of the Auction, at approximately 4:30 a.m. on July 20, 2010, the Debtors’ counsel who conducted the auction, announced that the debtors would entertain offers for the Debtor’s owned real property. Brown Media offered $10,000 in total plus any taxes owned for the three properties, said to be in Xenia, Bellevue and Urbana, Ohio.
The committee cited the debtors’ schedules showing the properties’ total value exceeding $550,000.