By: E&P Staff
The News-Journal Corp. is putting The Daytona Beach (Fla.) News-Journal up for sale.
In a memo posted on Romenesko, News-Journal Corp. owners the Davidson family told employees the decision to put the paper on the block was made in light of a recent appellate court finding.
On April 3, a federal court in Atlanta struck down the News-Journal’s appeal over the value of minority owner Cox Enterprises’ shares. In 2004 Cox sued the company claiming it misspent money for the naming rights to a Daytona Beach arts center with ties to the Davidson family.
Under Florida law, the News-Journal is allowed to buy Cox’s stake in the company. There was a hearing to determine how much Cox’s shares were worth.
The court determined Cox was owned $129 million. The News-Journal appealed the finding.
After the April 3 court decision, the News-Journal had 10 days to pay Cox the $129 million in yearly installments or to sell the business.
Below is a copy of the memo.
Sent: Thursday, April 10, 2008 11:20 AM
To: News-Journal Everyone
Subject: News-Journal Corporation
Dear News-Journal Corporation family and friends,
In light of the appellate court’s denial of News-Journal Corporation’s last request for rehearing, the options available to the company have narrowed to the point that it is now clear that the company will be sold as a going business. All other options are foreclosed by the result of the litigation and the terribly unfavorable conditions in the credit market and the capital market. We do not yet know the form this sale will take or the timing, but we know that is will be sold as a going and continuing business.
All of us are anxious to know what will happen to us personally after this transition period. We want to assure you that we care about your personal well-being and will help you to the best of our ability with any issues concerning your employment. Change here is inevitable, but whatever happens this business will continue operating as a going concern. It will not close or stop doing business.
You have read that “dissolution” of the corporation is one possibility. This would not be the same as a piecemeal sale of assets but rather a sale of the whole business. Whatever transpires, your pension, 401(k) funds and other funds outside the company are protected by contract and by Federal regulation.
Throughout this litigation, you have done a great job of staying focused on producing high quality publications. Thank you very much. It continues to be in all of our best interests to continue working positively during these difficult times.
Marc L. Davidson
Georgia M. Kaney
David R. Kendall
Julia Davidson Truilo