ANCHORAGE (CN) — Alaska’s biggest daily newspaper can keep printing after a federal bankruptcy judge late Monday approved a $1 million so the Alaska Dispatch News and its creditors can proceed with Chapter 11 bankruptcy.
U.S. Bankruptcy Judge Gary Spraker, after hearings on Thursday, Friday and Monday, and multiple side negotiations over the weekend, approved the Dispatch News’ use of money in its accounts to pay carriers, employees’ wages and past-due workers compensation and health insurance premiums.
Alaska Dispatch News LLC filed for Chapter 11 bankruptcy protection on Aug. 12. Publisher Alice Rogoff said then she had a transition plan to keep the paper going while her attorneys worked out the Chapter 11 filing and eventual sale of the paper.
The loan, referred to as "debtor-in-possession" financing, comes from Binkley Co. LLC, Fairbanks natives and siblings Ryan, Wade and James Binkley and Kai Binkley Sims, who own several tourism companies in the state.
Ryan Binkley and Alaska Inupiaq Native and Nome resident Jason Evans, president of Rural Energy Enterprises and owner of Alaska Media LLC, which publishes three rural Alaska newspapers, took over as publishers on Aug. 13. They will run the day-to-day operations until the conclusion of bankruptcy proceedings.
Binkley Co. LLC has offered to buy the paper for $1 million.
Much of the first two hearings were spent covering the most pressing bills to keep carriers from walking off their delivery jobs, back rent and utilities, and unpaid insurance premiums for health insurance coverage for 200 writers, sales and administrative staff.
Rogoff testified by telephone from an unnamed location out of state on Thursday that she had spent and lost $17 million of her own money shoring up the Dispatch News since buying it for $34 million from McClatchy in 2014.
The Dispatch News has been steadily losing paid subscribers, with annual operating losses in the millions – an estimated $125,000 weekly.
By the time Rogoff filed for Chapter 11, five other entities had sued her and her publishing company in Anchorage Superior Court for unpaid bills, including newsprint, construction services and rent on warehouse space to hold a printing press. A former editor and part owner of Alaska Dispatch.Com is also suing Rogoff for breach of contract on purchase of his remaining shares before merging the online site with the print-based Anchorage Daily News, to become Alaska Dispatch News.
An eviction hearing was adjourned in state court Monday after the building owner of the current operating press, GCI, asked for a continuance until negotiations on use of the facility by the interim publishers during Chapter 11 were concluded.
“It is more complicated than a simple ‘leave the premises,’ given the printing press and other things,” said Anchorage Superior Court Judge William Morse. “So I'm perfectly willing to let the bankruptcy court act first.”
GCI’s attorneys revealed later Monday at the bankruptcy hearing that they would withdraw their objection to the DIP loan once they received a signed guarantee from Rogoff for the $1.4 million in unpaid rent and utilities.
Cabot Christiansen, attorney for the Alaska Dispatch News, and Binkley’s attorney Erik LeRoy assured the judge that was forthcoming.
“I think there's been substantial testimony showing the need for the DIP loan and the lack of any alternative,” Christianson told the bankruptcy judge.
“If the print newspaper were discontinued, the company would lose the bulk of its operating revenue,” Rogoff said in a sworn statement filed in bankruptcy case last week. “The company could not cover basic operating expenses and would be forced to cease operations.”
This Monday hearing sought objections from any creditors in addition to GCI and the U.S. Chapter 11 Trustee to proceeding with the debtor-in-possession loan and continued operation of the paper as proposed.
All but the attorneys for two leased locations of the main operating press in the GCI-owned building and the secondary nonworking used press that was supposed to take over printing, in a building owned by Arctic Partners, quickly registered their assent to waive any objections that would hold up the debtor-in-possession loan.
“There is a whole host of items there, of unanswered questions,” Judge Spraker said after hearing lengthy discussion on the eventual disposition of the presses. At the end, he said he was comfortable with signing off on the order for the interim loan once it reached his chambers.
The next bankruptcy court hearing is Sept. 11, when the court will consider a motion to sell Alaska Dispatch News to the Binkley Co. The GCI eviction case is set to continue in Anchorage Superior Court on Oct. 13.
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