At a hearing in Wilmington, Del., Thursday, U.S. Bankruptcy Judge Christopher Sontchi called "posturing" Chicago financier James Tyree's threat to walk away from the sale -- forcing liquidation of the Chicago Sun-Times parent -- unless all unions approved significant contract concessions by next Tuesday.
But by setting an Oct. 7 date for an auction of Sun-Times Media Group assets, with the sale approved the next day, the judge effectively set a new date for concessions. In interviews with the Chicago Sun-Times and Chicago Tribune published Friday, Tyree emphasized that he will not close on the sale without the concession, which include a three-year extension of a 15% pay cut that was to be restored when the company was sold, and major changes to work rules.
Tyree stands to lose a $500,000 deposit if he walks away from the sale before early December, Michael Oneal and Julie Johnsson reported in the Tribune.
Five of the company's 18 unions have voted to reject the concession demands. Reacting to the judge's order, the president of the largest union, the Chicago Newspaper Guild, said it was essentially a call to negotiate.
In a memo to employees released as hearing was going on Thursday, Sun-Times Media Group Chairman and interim CEO Jeremy Halbreich argued the Sept. 29 deadline was important.
The Q&A form memo stated:
"Q. If the unions don't vote for the amendments by September 29, what is likely to happen?
?A. Getting all of the required union concessions is one of several conditions that must be met before the closing of the transactions contemplated by the Asset Purchase Agreement that we filed with the Bankruptcy Court in Delaware. September 29th is an important deadline that has been set by the Buyer of our assets. If we don't have all of the required union amendments by that time, the Buyer has said that it will not close on the transaction since this important condition to the sale will not have been met. This would likely lead to the other interested parties in the bankruptcy (IRS, U.S. Trustee, UCC) quickly moving to convert our bankruptcy case to a Chapter 7 Liquidation on or before October 8, the date on which the final sale hearing is currently scheduled. Any such conversion would preclude the possibility of a sale."
The memo went on at length about very specific consequences of liquidation, including such questions as, "If we close our doors, would I get my last paycheck and when would I get it?"
By: E&P Staff The judge presiding over the Sun-Times Media Group's bankruptcy case has effectively tossed out the Sept. 29 deadline for union concessions set by the chain's prospective buyer.