UPDATE: Hearing on Insiders Bid for Brown Publishing to Resume Next Thursday

By: Mark Fitzgerald

After a three-hour session Thursday, U.S. Bankruptcy Court Judge Dorothy Eisenberg postponed the hearing on the Brown Publishing Co. bankruptcy sale until July 29 to review paperwork submitted Thursday.

Brown Media, the entity formed by Brown Publishing CEO Roy Brown and two other top executives, won the all-night auction for nearly all the chain with a $22.4 million bid, according to documents filed Thursday in U.S. Bankruptcy Court in Central Islip, N.Y.

The parent company of the Delphos (Ohio) Daily Herald was declared the winning bidder for three small Ohio newspapers and their related assets: one daily, The Times Bulletin in Van Wert and two weeklies, the Putnam County Sentinel and the Ada Herald. Delphos Herald Inc. bid  $3.59 million for the papers.

Brown Media’s bid was higher than its initial “stalking horse” bid of $15.9 million for Cincinnati-based Brown Publishing, owner of 15 dailies, 32 paid weeklies, 11 business journals and numerous other publications. When Brown Publishing filed for bankruptcy May 1, it declared debts of it had debts $104.6 million and said its properties had a book value of $94.1 million.

Thursday afternoon a hearing was scheduled on the sale in the courtroom of Bankruptcy Judge Dorothy Eisenberg.

The auction process has been criticized in court papers by the official committee of unsecured creditors who claim it was rigged to discourage bidding and minimize the price the chain could fetch.

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