By: (AP) Journal Communications Inc. may have violated securities laws in some states when it sold interests in a stock trust to employees without registering them with the states, the media company says.
Journal Communications said that as a result, it is offering to buy back up to $11.2 million worth of units in the trust.
The company, which owns the
Milwaukee Journal Sentinel and 42 radio and television stations, said in a filing Tuesday with the Securities and Exchange Commission that it had registered the stock trust units with the SEC, but said it had not done so under the state securities laws.
The company said it had relied on exemptions from state registration requirements for which it may not have been qualified.
At issue are 318,517 units sold from June 2000 through last October to employees in California, Idaho, Louisiana, Maryland, Minnesota, Missouri, Nebraska, and Tennessee.
The company recently disclosed plans to sell stock to the public for the first time.
If the initial public offering goes through, it would fundamentally change the structure of what has been an employee-owned company for more than 60 years.
Journal Communications said employees choosing to sell stock trust units back to the company would get the original purchase price less any dividends paid, plus annual interest of 4.5% to 10%, depending on the state.
Company operations in the states involved in the filing include publishing, broadcasting, telecommunications, printing, and direct marketing services.
The trust in which Journal Communications employees hold units owns 90% of the company's stock. Heirs of the man who established the trust in 1937 own the rest. Neither the stock nor the units are publicly traded.
Paul Bonaiuto, the firm's chief financial officer, said Wednesday it had no further comment on the matter.
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