Judge approves sale of Alaska Dispatch News
A federal bankruptcy judge approved the sale of Alaska’s largest newspaper to a Fairbanks family Monday afternoon for $1 million after a hearing that took several hours.
Ryan Binkley, of The Binkley Company, says they’re taking a business risk, but is optimistic about the future of the paper. The group, comprised of the Binkley siblings and Jason Evans, who owns Alaska Media, LLC, had already loaned the newspaper $1 million after a bankruptcy hearing in August.
“There’s a lot of risk in this deal,” Binkley said. “There’s nothing certain about it. We’re willing to take that risk because we believe the turnaround is possible. We believe there’s a viable business here.”
Alice Rogoff, who bought the paper three years ago, testified in court that she had tried to find other potential buyers of the paper, but The Binkley Company was ultimately the only group to come forward with an offer. Bankruptcy court filings shows Rogoff owes at least $2.5 million to creditors, which includes a number of businesses and individuals.
Mike Mills, an attorney representing the Unsecured Creditors Committee (UCC) argued $1 million wasn’t a fair sale price. The judge’s decision likely means the paper’s creditors will not get their money back.
“They’re very unlikely to get paid out of the bankruptcy estate,” said Cabot Christianson, attorney for the Alaska Dispatch News. “That’s very unfortunate. That’s what the bankruptcy system is designed for – is when there’s not enough money to go around. If there’s not enough money to go around, by definition, somebody doesn’t get paid. But the employees got to keep their jobs and Anchorage gets to keep a newspaper and there’s some value there.”
“I think it’s a shame they’re left holding the bag in this,” Binkley said. “We’ve learned a lot about the bankruptcy process through this. I think they didn’t get what they deserved here. That’s a shame.”
Testimony during the hearing highlighted the paper’s dire financial situation. Alaska Dispatch News’ finance director, Erin Austin, said in court by the end of this week, the paper would have less than $500.
Binkley acknowledged this deal is only the first step in a long process of turning the paper around.
“One challenge is we’re not seasoned operators,” he said. “We’re new to this industry. We’ve been seeking expert counsel from across the country.”
The sale will officially close later this week, which is when the transition of ownership will happen.
“There’s no single biggest thing,” Binkley said when a reporter asked what he would do differently immediately. “Like I said before, it’s going to be a lot of little decisions. Every day there will be one hundred of them. We have to get out there in the marketplace to convince folks, to convince advertisers, convince our readers that this is still a viable product.”
The revised Asset Purchase Agreement (APA) says The Binkley Company will have to determine before September 21 what assets it will acquire from 5900 Arctic Boulevard, which currently houses an inoperable printing press.
Binkley said the group does not plan to shift to an online-only presence, but one of the biggest challenges is to find where to print the paper. There’s currently a short-term rental arrangement between The Binkley Company and GCI for its printing press at the facility on Northway Drive.
“The paper’s got to hit every doorstep every morning,” he said. “There are again, there’s no secret now, there’s the option to outsource printing or to continue printing it ourselves as a newspaper. There are other printing facilities in the state we could use for outsourcing. There’s the GCI property and there’s the Arctic Road property. It’s going to be one of those options.”
“We don’t believe print media is dead, certainly not in the country and not in the state of Alaska,” Binkley told reporters when asked why the company would continue a print product.
Erik LeRoy, the attorney for The Binkley Company, called the judge’s decision and the sale process an “exceptional event.”
“In less than 30 days, the Binkleys loaned a million dollars and the debtor spent a million dollars,” he said. “And now in the next one week, the Binkleys are going to spend another half a million dollars that really are the debtor’s responsibility – for wages and rent at GCI. It’s a huge money sink they’ve got to get their hands around.”
On September 22, there will be a hearing over the U.S. Trustee’s motion to convert or dismiss the Alaska Dispatch News’ Chapter 11 bankruptcy case. Kathryn Perkins from the Office of the U.S. Trustee said in a court filing argued:
“A Chapter 7 trustee would resolve the conundrum of the Debtor’s post Sale Hearing management and ensure that a bankruptcy fiduciary was in place to preserve and recover whatever value they could from any unsold assets and/or pursue any claims the estate may have for the benefit of the Debtor’s creditors.”
That hearing will take place inside federal bankruptcy court at 1 p.m.