By: Mark Fitzgerald
Brown Publishing Co.’s bank lenders are taking over the chain of 15 dailies and numerous other publications under an order signed Friday by the judge overseeing its bankruptcy case.
According to the order, Ohio Community Media LLC – a corporation formed by the banks owed $74 million – are buying nearly all Brown Publishing’s assets for $21.75 million in the form of a credit bid, that is, using some of the debt the banks are owed rather than cash.
Ohio Community includes PNC Bank, Prudential Insurance Co., Wells Fargo Bank, Allied Irish Bank, AIB Debt Management, Brown Brothers and Harriman, and Huntington National Bank.
Judge Dorothy Eisenberg also approved a separate sale of Brown Publishing’s Dan’s Papers Inc., a chain of newspapers on Long Island, N.Y. A company called Dan’s Papers Holdings LLC is buying the cluster for $1.75 million, according to the order.
The top three executives of Brown Publishing – CEO Roy Brown, General Counsel Joel Dempsey and CFO Joseph Ellingham – had formed a group to buy the company back from bankruptcy, but their winning bid of $22.4 million failed when their financial backer, Guggenheim Partners, walked away from the deal.