Lender Withdraws on Brown Publishing Purchase

As reported by Springfield News Sun, court documents show that a bid to purchase the assets of Brown Publishing Company by Brown Media Corporation has fallen through because the lender, the name of which is not published, has withdrawn.

Filed in the U.S. Bankruptcy Court in the Eastern District of New York in April, the Brown Publishing Company, owner of newspapers in Ohio and many other states, had received their top bid from Brown Media Corporation.

Brown Publishing President and CEO Roy Brown, and two other executives from Brown, Joseph Ellingham and Joel Dempsey, created the Brown Media Group. They had been declared winners in July.

Brown Media's $22.4 million bid to assume a majority of the company's assets, lost their lender per court papers filed on August 20.

The next highest bidder, PNC Bank, which led the group of its senior creditors, looks to close by September 3.  The amount of their bid is not publicly recorded., but Brown Publishing Company, and its real estate, is said to be worth $26 million per a debtor's auction earlier in the year.

"The projected liquidation values of the Debtors' assets are significantly lower than the value to be gained from the proposed sale of the debtors' assets to PNC." Reports Brown Publishing.

On July 4 a projection as to the resale value of Brown's Publishing assets was listed somewhere between $6.5 and $9 million.

Attorneys for Brown are asking that the company be allowed to continue operations using cash collateral until the PNC sale goes through.  If they are restricted from operations the company will have no other recourse other than to close down and start selling off all of its assets, as reported in court filings.

Brown Publishing said, it "will be forced to shut down their operations and liquidate all assets, resulting  in a disastrous loss of value for their respective estates as well as a corresponding decrease in the value of the first lien lenders' collateral."

On August 13 a sale was closed with Northwest Ohio's newspaper company Delphos Herald Inc. in the amount of 3.6 million for Brown Publishing assets in Ada, Van Wert and Putnam counties, in Ohio.

Due to the massive decrease in advertising revenue between October 2008 and February 2009, and a downturn in the economy, Brown Publishing executives filed for protection and began its bankruptcy case in April of this year. 

Court documents show that when other companies, and individuals, that did business with Brown tightened their advertising budgets, it greatly affected Brown's own budget.

Brown Publishing's unaudited assets were listed at $94 million and its unaudited liabilities were $104.6 million on March 31 of this year.

The entire company, based in Cincinnati, has 78 publications producing dailies, weeklies and business journals. Newspapers under the Brown Publishing name are distributed in Urbana, Beavercreek, Bellbrook, Centerville, Kettering, Springboro, Englewood, Huber Heights, Vandalia, Piqua, Troy and Xenia.

If you or your company is facing bankruptcy, contact a Bankruptcy Attorney that can help you understand all of your options.