‘O.C. Register’ Carriers Can Recoup Money in New Freedom Bankruptcy Plan

By: E&P Staff

Some 5,000 current and former newspaper carriers who sued the Orange County Register — only to see their settlement apparently voided by parent Freedom Communications? bankruptcy — will be able to pursue part of their settlement under terms of a new plan approved by U.S. Bankruptcy Court in Wilmington, Del., Wednesday.

The new plan establishes a $14.5 million litigation trust to pay out general unsecured claims, including the newspaper carriers, according to an account in the Orange County Register by its Washington bureau chief Dena Bunis.

The carriers lawsuit, begun in 2003, was a landmark in the newspaper industry. They claimed they were treated like employees, but paid as independent contractors with none of the benefits of regular Register employees. Last year, Freedom and the carriers agreed to a $28.9 million settlement, which left their employment or independent contract status up to the Register’s sole discretion. But when Freedom filed for bankruptcy protection in October, it claimed the settlement was voided.

It remains unclear exactly how much the carriers will receive from the litigation trust as a result of the settlement, but the agreement allows them and other unsecured creditors to sue former and current Freedom directors to attempt to recover more money.
Clarification: An earlier version of this story said the carriers “successfully sued” the Register. As the story notes, the case was settled before reaching a jury.

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