ANCHORAGE (CN) — A federal bankruptcy judge late Monday approved the sale of Alaska’s biggest daily newspaper to third-generation Alaskan siblings who are new to the newspaper industry but whose family members have a long history of public and private service in the 49th state.
U.S. Bankruptcy Judge Gary Spraker, after an all-day hearing, signed an order allowing Binkley Co. LLC, composed of Fairbanks natives and siblings Ryan, Wade and James Binkley and Kai Binkley Sims, to purchase Alaska Dispatch News for $1 million.
The price has already been paid through Binkley’s $1 million loan to the newspaper as debtor-in-possession financing to keep the staff writing, the press running, and paper carriers delivering.
Alaska Dispatch News LLC filed for Chapter 11 bankruptcy protection on Aug. 12. The Dispatch News has been steadily losing paid subscribers, with annual operating losses in the millions – an estimated $125,000 weekly.
Several hearings in the past month were spent detailing how the loan would be spent to keep the paper its 200 writers, sales and administrative staff going until publisher Alice Rogoff could find a buyer. The hearings brought a number of secured and unsecured creditors with a stake in the proceedings.
Rogoff acknowledged that her Chapter 11 filing was prompted by one creditor, GCI, which filed an eviction notice on Aug. 11. GCI said it was owed $1.5 million in rent and utilities for housing the paper’s only working press long past the time when it should have been removed so that GCI, a telecom, could consolidate its operation under one roof.
Rogoff said she had been trying to find other ways to keep the paper going, including finding investors, splitting the print version from online, or outright sale.
Rogoff and her bankruptcy attorney, Cabot Christianson, told Judge Spraker on Monday that while they had half a dozen unnamed parties come to Anchorage to consider purchasing the paper, the Binkleys were the only ones to follow through with an offer.
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, have been running the day-to-day operations since the Binkleys provided the debtor-in-possession financing.
Spraker told the packed courtroom Monday that the sales price was reasonable given that the Dispatch News would have to shut down without the sale.
“There is no more money. There is no more time. There’s also no more buyers,” Spraker said.
In approving the order, Spraker added: “I purposely bit my tongue and did not inquire why the buyer believes this is going to succeed going forward.”
The paper lost $4 million in the first six months this year, according to court filings. Nonetheless, Ryan Binkley expressed excitement as he talked to reporters on the courthouse steps after the hearing.
“We believe there’s a viable business here,” Binkley said. “We don’t believe print media is dead, certainly not in the country and not in the state of Alaska,”
He acknowledged that staff layoffs could be expected.
The new owners will need to determine by the next bankruptcy court hearing, Sept. 22, whether to acquire one of the two presses owned by Rogoff’s publishing company. One is still in the GCI-owned building; the other is also in Anchorage. The lease and construction services involving the second press are also tied up in a legal dispute. A third alternative is to send the paper out to an offsite printer.
By the time Rogoff filed for Chapter 11, multiple 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 the printing press.
A former editor and part owner of Alaska Dispatch.Com is also suing Rogoff for breach of contract for purchase of his remaining shares before merging the online site with the print-based Anchorage Daily News, to become Alaska Dispatch News.
During the proceedings Rogoff testified that she had spent and lost $17 million of her own money shoring up the Dispatch News since buying it just three years ago for $34 million from McClatchy.
Another of Rogoff’s attorneys, Bill Bittner, told reporters outside the courthouse it was the series of missteps over the press locations that led to the current proceedings and that has made her very sad for the people at Dispatch News.
“She’s glad it is handed off to a prominent group of Alaskans that will hopefully continue the great traditions of the AND,” Bittner said.
“There’s a lot of risk in this deal,” Binkley acknowledged. “We’re willing to take that risk because we believe the turnaround is possible.”
On Sept. 22, Spraker will hear a motion to from Kathryn Perkins, the trustee, on whether to convert to Chapter 7 or dismiss the Chapter 11 case. Conversion to Chapter 7 would allow a bankruptcy fiduciary to preserve or recover value from any unsold assets to try to satisfy creditors.
The GCI eviction case will be heard in Anchorage Superior Court on Oct. 13.