By: E&P Staff The Chicago businessman offering to buy the Chicago Sun-Times and its 57 sibling papers wants its union employees to agree by Sept. 29 to extend pay cuts that are supposed to end with the sale.
In a letter to union leaders expected to be delivered Thursday, Sun-Times Media Group (STMG) is asking the 18 unions to extend for three years the 15% cut in compensation they agreed to after the company filed for bankruptcy protection last March.
At that time, the unions came up with their own plans for reducing compensation, with most using a combination of wage cuts, unpaid furloughs and skipped pension payments.
Separately, STMG on Wednesday notified non-union employees that their pay will be cut as well. Under the company's formula, the first $25,000 in salary would be exempt from cuts, base pay between $25,000 and $100,000 would be reduced by 8%, and base pay over $100,000 would decrease by 11%.
James Tyree, chairman of Mesirow Financial, is leading a small group of investors who have offered $5 million in cash and the assumption of about $20 million in liabilities for the money-losing STMG. Under the proposed so-called 363 sale, the Tyree group will buy a "good" STMG that will not include a $625 million tax bill -- or the several pension plans.
In an interview Wednesday, STMG Chairman and interim CEO Jeremy Halbreich said the pensions would be shut down, and, when the "bad" STMG company ceases operations, will likely be taken over by the government. The Tyree group has committed to offering a defined contribution retirement plan such as a 401(k), he said.
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