In order for the Freedom Communications company to continue functioning through its Chapter 11 bankruptcy proceedings, a $4.5 million loan for OC Register was approved by bankruptcy judge Mark Wallace this December 14th.
This loan for the Freedom Communications was provided by the Silver Point hedge fund from Greenwich, Connecticut. The creditor Silver Point raised its previous loan by $1.5 million during this past week in order for the bankrupt company to remain active until the point in which it will start to sell its assets.
The Santa Ana-based Freedom Communications company has under its tutelage the Orange County Register and The Press-Enterprise. Both of these papers had made the company reached new heights, but unfortunately, this eventually led said company to want to expand into new areas. In the past 4 years since it started its aggressive expansion, the company has lost over $40 million.
The LA Register created during Freedom Communications’ expansion was deemed a commercial flop, being folded after only 5 months. This made the company think about restructuring its finances as well as revamping its current internal structure.
Silver Point was not the only bidder towards the offering of a loan. The company behind LA Times, Tribune Publishing, had attempted to offer a fund of $3 million towards Freedom Communication, but it was denied due to the higher sum provided by Silver Point.
The assets which will be put to auction after the 11th Chapter of bankruptcy will be completed are sought after by a number of high-ranking news companies. Besides Tribune Publishing, Digital First Media will also join in the court auction.
The current CEO of Freedom Communications will also bid on some of the assets put on auction, backed by a local group of investors, with a higher focus on The Press-Enterprise newspaper. Said CEO, Richard Mirman, has claimed that it wishes to create a partnership with the president of Freedom Communication, Eric Spitz, in order to buy out the company,
This alliance will reserve a seat for the developer Michael Harrah as well, who bought the company building back in 2014 for the hefty sum of $27 million. It is only speculative at this point to say if this alliance will be able to purchase the entire bankrupt company without any of the other competing bidders’ involvement.
Even if the $4.5 million loan for OC Register was approved by bankruptcy judge Mark Wallace, the exact date of the auction has not yet been released. But due to the information from a court document which states how the process is expected to end in March 2016, the court auction might begin in the next two months. Whoever will come on top in said auction, be them either the former leaders of Freedom Communications or other newspaper owning companies, as well as the fate of said company, will be clarified early next year.